BackBitcoin miner Core Scientific to shut down 37,000 mining rigs of Celsius Network
Bitcoin miner Core Scientific last month filed for Chapter 11 bankruptcy protection. It was said that Core Scientific was impacted due to a lawsuit with Celsius Networks LLC and its affiliates.
PremiumMonths long feud between two crypto companies Celsius Network LLC and Core Scientific Inc. has likely found its resolution. It is known that Celsius has agreed to let US-based Core Scientific shut down more than 37,000 of its mining rigs for which the digital-asset lender hasn't been fully paying. Celsius filed for bankruptcy in July last year, while Core Scientific filed for the same last month.
Bitcoin miner Core Scientific last month filed for Chapter 11 bankruptcy protection. It was said that Core Scientific was impacted due to a lawsuit with Celsius Networks LLC and its affiliates.
As per a Bloomberg report, Chris Koenig, a lawyer for Celsius, in a bankruptcy hearing Tuesday said that "We’re not seeking to make a dollar off of Core after today." He added that Celsius has agreed to let Core power down the rigs and both sides are close to finalizing a deal to end their hosting relationship.
According to court papers, Celsius owes around $7.8 million to Core for power costs tied to the rigs through November. The report added that turning off the rigs will save the US-based bitcoin miner thousands of dollars per day and Core could bring in an additional $2 million per month in revenue if it can sell the space currently occupied by Celsius to other customers.
Although the legal case continues, however, closing Celsius rigs is seen has a major win for Core Scientific.
Under the bankruptcy paper, Core stated they have around $1 billion to $10 billion in assets and liabilities, while their creditors are between 1,000 and 5,000.
In July last year, Celsius filed for voluntary insolvency resolution to stabilize the business and consummate a comprehensive restructuring transaction that maximizes value for all stakeholders. Celsius pointed to crypto exchanges as the implosion of Terra LUNA (“Luna") and its TerraUSD (UST) stablecoin (“UST") - as it accelerated the onset of a “crypto winter" and an industry-wide sell-off in 2022.
The year 2022 has been havoc for the cryptocurrency market due to extreme volatility, rising interest rates, and economic uncertainties. Such led to a series of shocks for crypto markets such as the collapse of Terra tokens, liquidation of Three Arrows Capital, and illiquidity crunch which led to the bankruptcy of exchanges such as Celsius Network, FTX, and Voyager Digital among others. Core too felt the impact and eventually filed for bankruptcy in late December.
On CoinMarketCap, at the time of writing, Celsius was trading at $0.509 up nearly 2%.
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