Summary:
- Lawyers representing the Bitcoin miner said the company was losing north of $53,000 daily due to a hosting agreement with Celsius.
- The company will shutter hosting services for 37,000 Bitcoin mining rigs owned by the defunct crypto lender.
- Both companies filed for bankruptcy following a harsh year for crypto asset prices in 2022.
Bitcoin mining company Core Scientific will shut down Celsius mining machines following an agreement between the two crippled crypto entities. The deal was disclosed during a bankruptcy hearing on Tuesday, per reports.&
Celsius hired Core Scientific to provide hosting services for the crypto lenders’ BTC mining business. The crypto mining company also received $54 million in funding from Celsius in 2021 as part of a $200 million fundraising effort.&
Core mounted legal pressure on Celsius in October 2022 claiming that the crypto lender owed around $5.4 million in hosting fees. Core Scientific lawyers told the court that powering Celsius mining machines cost the company $53,000 in losses on a daily basis. The company also told U.S. Judge David R. Jones that the hosting capacity provided to Celsius could generate roughly $2 million in revenue per month.&
On Tuesday, both entities agreed to unplug 37,000 mining machines owned by bankruptcy crypto lender Celsius. It’s unclear if the deal includes a payment of $5.4 million in hosting fees claimed by the troubled cryptocurrency mining company last year.
Core Scientific Bankrupt, Riot Blockchain Rebrands
A myriad of crypto companies collapsed amid sunken crypto prices and massive corporate failures among industry stakeholders. Core Scientific, previously a Bitcoin mining giant, filed for Chapter 11 bankruptcy protection in December 2022 citing market conditions.&
Another crypto miner, Riot Blockchain, rebranded as Riot Platforms in a bid to diversify as rising power costs in the U.S. threatens mining businesses.
Argo Blockchain also announced plans to sell its Helios mining facility in Texas to Mike Novogratz’s Galaxy Digital for $65 million. Argo also secured an additional $35 million loan to help stave off bankruptcy in the bear market.
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