After getting shut down by troubled Bitcoin (BTC) mining firm Core Scientific, Celsius Network’s mining arm plans to store 20,000 rigs from the equipment which was retrieved from the former.
Celsius Network believes that in no distant time, the miners will get new hosting facilities. For now, the firm is in the process of receiving the machines which were previously in Core Scientific’s custody.
“There are options for hosting in the market that will allow us to continue mining with positive operating cash flows and significant upside,” said Chris Ferraro, the Interim Chief Executive Officer (CEO) who also serves as the Chief Restructuring Officer.
Celsius Default in Obligation to Core Scientific
For a while now, there has been some sort of tension between Celsius Network and Core Scientific over the terms of a hosting agreement. According to Core Scientific which recently filed for bankruptcy in Texas, Celsius was presenting its Chapter 11 bankruptcy proceedings as an excuse not to fulfill its financial obligations to the mining host.
Prior to that time, Celsius requested an automatic stay at Core Scientific’s facility. However, the latter also filed a motion to reject the Celsius contract citing that its failure to pay its electricity bill is a material breach of contract which contributed to its liquidity problems and eventual bankruptcy. Altogether, Celsius has an outstanding debt of almost $8 million with the insolvent BTC miner.
At the beginning of this year, Core Scientific received approval to shut down over 37,000 mining machines that belong to Celsius. On January 3rd, all of Celsius’ mining equipment was powered down. Also, a 75 days ultimatum was given for Celsius to pick up every of its mining rigs seeing that it occupied a space that could generate $2 million monthly for Core Scientific.
In the days following, Celsius put up a set of brand-new MicroBT ASIC Rigs (2687 units), an M30S model with Hashrates ranging from 84-92 TH/s for sale. Collectively, they were valued at $1,342,747 to be handled by Touzi Capital LLC, a private equity firm. The notice of sale was filed at the United States Southern District Court of New York.