Core Scientific Shuts Down 37,000 Mining Rigs Belonging to Celsius

Core Scientific, one of the largest publicly traded crypto mining companies, has reached an agreement with bankrupt crypto lender Celsius Network to shut down over 37,000 mining rigs belonging to the latter.

According to a Bloomberg report, this brings a conclusive end to a conflict that has lingered for months as Celsius have been unable to meet up with its end of the agreement since after filing for bankruptcy. It would also set a precedent for other clients who dispute the hosting agreement with the firm.

The Bitcoin (BTC) miner had earlier sought approval from the court to reject the Celsius Contract after it termed the lender’s inability to pay its power bills a material breach of contract which contributed to its liquidity crisis. 

Celsius now owes Core Scientific about $7.8 million, a burden that the miner says it can no longer bear.  As such, all of Celsius’s mining rigs will be powered down effective from January 3 and will also not be restarted during the transition period. Additionally, Celsius has up to 75 days to pick up all of its mining rigs.

Interestingly, according to the court filing, the termination of its agreement with Celsius will see the miner generate $2 million monthly from the space that is currently occupied by Celsius’s mining rigs. Core has an agreement that allows it split the cost of powering the mining rigs it held for Celsius.

Core Scientific Files for Bankruptcy After a Difficult Season

Despite efforts by the BTC miner to avoid the unspeakable, it still filed for bankruptcy due to plummeting revenue and low BTC prices. Notably, the firm didn’t have enough to cover its operational costs. Likewise, its exposure to the bankrupt Celsius Network as well as increased electricity cost also contributed to the fall of the miner. 

Although, B. Riley, a crypto lender and investment firm offered to finance the operations of Core Scientific up to the tune of $72 million which made the miner’s stocks jump up to 200%. 

However, this was still not enough as its stock experienced a steady decline. Amidst all of the troubles experienced by the miner and the bankruptcy filing, the company plans not to liquidate but continue with its mining operations.