Bankrupt Core Scientific will shut down 37,000 mining installations
Mining company Core Scientific, which filed for bankruptcy in late 2022, will shut down more than 37,000 mining rigs that belonged to another bankrupt cryptocurrency company, Celsius Network. Bloomberg writes this, citing legal representatives of Core Scientific.
Celsius reportedly made a partial commitment to cover Core Scientific’s power costs before the bankruptcy. In exchange, the miner hosted Celsius’ cryptocurrency mining devices. However, after Celsius went bankrupt in July 2022, the company stopped fulfilling its part of the agreement. Celsius Network reportedly owed Core Scientific at least $7.8 million. Shutting down the mining units will help the company save thousands of dollars every day.
According to Bloomberg, more than 40 percent (100,000) of http://crypto-currency.website/?p=164 Core Scientific’s mining rigs belong to the company’s customers, not the miner. Luxor Technologies Chief Operating Officer Ethan Vera believes the court’s decision to side with Core Scientific will help the bankrupt company avoid surprise actions from customers.
Meanwhile, the mining provider is expected to receive $37.5 million from creditors as early as January. Creditor representative Chris Hansen told the court that existing stakeholders continue to believe in the long-term viability of Core Scientific, despite the company’s recent problems and the drop in the price of bitcoin. The company is still generating profits, but not enough to cover debts owed to creditors
Core Scientific first became aware of Core Scientific’s problems in late October 2022. At that time, the company said it could run out of funds by the end of 2022. At that time the miner had only 24 BTC and about $26.6 million in cash. According to the miner, the difficult situation was caused by a long-term decline in bitcoin prices, an increase in energy costs, the increase in the hashing rate of the global bitcoin network and the lawsuit against cryptocurrency lender Celsius.