Core Scientific Stopped 37,000 Celsius Miners To Resolve Protracted Conflict

Key Points:

• Core Scientific stopped 37,000 mining devices from bankrupting cryptocurrency company Celsius to resolve a long-running conflict between them.
• Core Scientific attributed its bankruptcy to Celsius’ failure to pay its expenses in full.
• Celsius owes Core at least $7.8 million in electricity for its mining rigs.

Core Scientific stopped 37,000 mining devices from bankrupting cryptocurrency company Celsius to resolve a long-running conflict between them, according to Bloomberg.

Their storage agreement allows Core to move some of its electricity costs to Celsius. Still, the bankrupt crypto company has yet to pay those bills since it filed for Chapter 11 protection in July, according to Core Science attorneys.

Given the recent bankruptcy of Bitcoin miners hosting third-party rigs, Core Scientific filed for bankruptcy last month and partly blamed Celsius’s non-payment for the crash it is shedding.

The case could serve as a legal precedent for other Core Science customers disputing the terms of a hosting agreement with the company. Over the last year, soaring energy prices due to extreme weather conditions and Russia’s invasion of Ukraine have sharply increased the operating costs of electricity-intensive mining operations.

About 41% of Core’s total fleet or 100,000 servers, were dedicated to hosting its customers as of the company’s Nov. 7 operational update. 

According to court documents, Celsius owes Core at least $7.8 million in electricity costs related to the rigs through November. Turning off the rigs would save Core thousands of dollars a day, and the company could bring in an extra $2 million per month in revenue if it could sell Celsius’ existing space to other customers.

“We’re not seeking to make a dollar off of Core after today,” said Chris Koenig, a Celsius lawyer, in a Tuesday bankruptcy hearing. Celsius has agreed to let Core power down the rigs, and both sides are close to finalizing a deal to end their hosting relationship, he added.

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