• Core Scientific plans to shut down 37,000 bitcoin mining rigs belonging to now-defunct crypto lender Celsius.
• Celsius owes Core Scientific approximately $7.8 million for energy and hosting costs.
• Core Scientific filed for Chapter 11 bankruptcy protection and lawyers representing the company have stated that shutting down the bitcoin mining devices would save the firm a substantial amount of funds.
Core Scientific, one of the largest bitcoin miners in the industry, has announced plans to shut down 37,000 bitcoin mining rigs belonging to now-defunct crypto lender Celsius. The news follows Celsius looking to extend customer claims.
Core Scientific has been unable to make regular payments to the hosting contract as outlined in the agreement between the two bankrupt firms. As a result, Celsius reportedly owes Core Scientific approximately $7.8 million for energy and hosting costs. This debt has been accumulating since July, and Core Scientific lawyers have stated that shutting down the bitcoin mining devices would save the firm a substantial amount of funds. The company could potentially make $2 million per month if it rents out the hosting seats to another mining operation.
On Nov. 7, 2022, records show that 41% of Core Scientific’s servers are for customers paying for hosting services. Consequently, the company filed for Chapter 11 bankruptcy protection on Dec. 21, 2022, but with the condition that the firm’s machines continue to operate in order to pay down debt.
Chris Koenig, a lawyer for Celsius, has stated that the crypto lender has agreed to shut down the 37,000 bitcoin mining rigs and end the hosting contract. „We’re not seeking to make a dollar off of Core after today,“ Koenig remarked.
Core Scientific’s decision to shut down the bitcoin mining rigs belonging to Celsius is a major development in the two bankrupt firms‘ ongoing debt dispute. It remains to be seen how this move will affect the outcome of the dispute, as well as how it might impact the broader industry.