- Celsius filed for bankruptcy on July 12, 2022, and Core Scientific filed on December 21, 2022.
- The plug will be pulled on Celsius’ mining rigs on January 3, 2022, as per court orders.
- The host company Core Scientific is losing $2 million in incremental revenue per month.
Another Bitcoin mining company is to shut down their mining rigs, as the whole BTC mining industry is suffering from a trifecta of problems, rising energy prices, increasing difficulty and depleting prices. Core Scientific (CORZ) to shut down mining rigs tied to Celcius mining.
Core’s largest client has 37,000+ machines after judges’ approval to reject the contract by the US bankruptcy court. It should be noted that both companies are undergoing chapter 11 bankruptcy, where Celcius Mining filed on July 12, 2022, along with the parent company Celcius Network and Core Scientific filed on December 21, 2022.
The two companies are going through litigation over the said contract. Core claims that the necessary dues are not being paid by Celcius. In contrast, Celcius claims that Core increased the power rate unilaterally, and this is not concerning the agreed-upon contract.
Per the court order on January 4, 2023, the plug will be pulled on all of Celsius’ mining rigs effective on January 3, 2023, and they shall remain off until the transition period. Order is also to pick up the mining machines within 75 days of the shutdown date, and Celsius will pay for the logistics.
Core’s bankruptcy judge David R. Jones, said in a Tuesday hearing that the motion to reject does not violate the automatic stay on Celsius’ property, which comes under the US bankruptcy law, that once a petition of Chapter 11 bankruptcy is filed, then the creditors are no longer entitled to collect any debts from the bankrupt debaters.
Core Scientific asked the Southern District of Texas Bankruptcy Court on December 28, 2022, to reject Celsius’ Mining contracts immediately, where the hosting company is claiming nearly $2 million monthly incremental revenue losses.
The motion further says that if the host Celsius Mining were released from obligation with Core Scientific, the $2 million in question could be generated by finding other clients or using the space to set up their machines.
On January 3, 2023, hearing Core Scientific argued regarding the urgency of the matter as they are losing $28,840 per day in power costs alone. And in response, Celsius agreed to cancel the contract and take the machines back.
Celsius’s response to the January 2, 2023 motion said:
“This purported ‘emergency’ is entirely of Core’s own making and does not warrant a hearing on just two business day’s notice.”
Celsius had asked the hearing to be moved to January 23, 2022, as they need to consult their leaders regarding the situation, and it is impossible to be done in just two business days.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/01/05/celsius-mining-rigs-to-be-shut-down-by-core-scientific/