Rhodium Encore LLC, a bankrupt bitcoin mining company, has received court approval for a unique debtor-in-possession financing plan that allows borrowing in either U.S. dollars or bitcoin.
Galaxy Digital Holdings Ltd., a blockchain firm led by Mike Novogratz, has offered to provide Rhodium with a loan of either $30 million in dollars or 500 bitcoin. The dollar loan carries a 14.5% interest rate, while the bitcoin loan has a 9.5% interest rate.
Rhodium can repay the BTC loan in dollars at a reasonable market rate at closing. This type of cryptocurrency-based funding is rare in Chapter 11 bankruptcies due to bitcoin’s volatility.
Rhodium filed for bankruptcy in August 2024, primarily due to financial issues stemming from a dispute with its landlord and power supplier, Whinstone US Inc., which was later acquired by Rhodium’s competitor, Riot Platforms.
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