Bitcoin Mining Firm Core Scientific To Sell 27k Gears To Settle NYDIG Debt

• A few days before the holidays in 2022, the firm filed for bankruptcy.
• As part of its 2020 expansion, the company borrowed $77.5 million.

In order to settle a $38.6 million debt to the New York Digital Investment Group (NYDIG), the once-prominent bitcoin miner Core Scientific signed an agreement to transfer 27,403 of its mining equipment to the latter. A few days before the holidays in 2022, the firm filed for bankruptcy.

Over 27,000 mining rigs, or about 18% of Core Scientific’s total equipment, will be transferred to NYDIG in exchange for the elimination of its debt, as stated in a statement with the bankruptcy court for the southern district of Texas. The agreement must be sanctioned by the authorized judges before it can go into effect. Core Scientific said that the equipments were no longer necessary to company operations, thus emphasizing the need to repay the debt.

Crypto Market Bounces Back in 2023

As part of its 2020 expansion, the company borrowed $77.5 million from an investment management firm. As a result of declining revenues brought on by the bear market, however, debt settlement ceased around the year 2022.

As of Q3 2022, the miner’s net losses had ballooned to $1.7 billion. As a last-ditch effort, it sold roughly 8,000 BTC, nearly its entire hoard, but it wasn’t enough to stop the freefall. Core Scientific was driven to file for Chapter 11 bankruptcy at the end of December because of the low price of the major cryptocurrency and growing energy prices.

On the announcement, its stock price plummeted to $0.05, a new all-time low. CORZ’s price has risen, though, since the cryptocurrency industry has been doing well so far in 2023. The current value of a share of stock is $0.47, up from a December value of $0.20.