Cointerra File For Bankruptcy

The company's flagship TerraMiner IV shipped in early 2014 at approximately $6,000 per unit but failed to achieve its promised 2 terahashes per second performance. Customers filed a class action lawsuit and complained they never received ordered units, according to complaints filed with the Federal Trade Commission. The underperformance damaged customer confidence and spawned disputes that consumed management attention.

Data center operator C7 Data Centers sued Cointerra for $4.25 million in unpaid hosting and electricity charges, emerging as the single largest creditor alongside hundreds of other vendors and customers owed money through the bankruptcy petition. The C7 dispute accelerated cash pressures as the company burned through remaining capital on research and development for its next-generation platform.

In September 2014, Cointerra announced the Aire Miner, a $2,499 device built on 16nm SHIVA ASIC chips scheduled to tape out in late September and ship in Q1 2015. The strategy aimed to leapfrog competitors stuck on older 28nm process nodes, but the market had shifted. Competitors offered functional 28nm miners at sharply lower prices, and miners had largely moved beyond the profitability windows that earlier generations had offered.

The company needed $8 million to $10 million to complete the 16nm development, manufacturing tooling, and initial production runs. Lenders unwilling to finance a hardware startup facing commodity pricing pressure declined to provide bridging capital. By January 2015, Cointerra's available options had evaporated. Creditors are scheduled to convene on February 27 for liquidation proceedings.