- Core Scientific may stay in the business after bankruptcy.
- The company may sell some of their facilities.
- Crypto winter has influenced the mining industry to a great extent.
The Company Plans To Stay in The Business
The year is about to end but it seems like crypto winter is here to stay. From the stablecoin ecosystem to crypto miners, it has shown no mercy to anyone in the sector. Core Scientific, a cryptocurrency mining company, became the latest member in the insolvency list. CNBC reported that the organization is filing Chapter 11 of Bankruptcy, but plans to stay in the mining business.
Recent news says the crypto miner may sell facilities which they planned to bring online the next year. They might keep the ones worth upto 850 MW. The company announced on December 21, 2022 that they are expected to enter a restructuring support agreement with Ad Hoc Noteholder Group.
While the company is going through the restructuring process, it will not affect their operations in any way. They will keep mining cryptocurrencies in their cutting edge data centers. The agreement is expected to lower their indebtedness as well as annual interest expense.
In October 2022, Forbes reported that the company may skip payments on financial and promissory notes which may lead them to opt for bankruptcy. Just a couple of months before this news, Core Scientific was worth $1 Billion. They said that increased energy required to mine Bitcoin, money owed to Celsius and more remained primary reasons for the damage.
According to Forbes the firm had sold 1,027 BTC worth over $21 Million at the time of sales during September and October 2022. They also liquidated around $167 Million worth of Bitcoin during June 2022. Company’s financial crises reflected the state of the digital assets market as the crowned asset lost over 70% from its value.
B.Riley Financial, an investment bank and the company’s biggest shareholders announced that they are willing to offer $72 Million to Core Scientific. They said that the crypto miner’s plan to file bankruptcy took them by surprise but it is not necessary at all.
Declining crypto market has caused national authorities to act to prevent their citizens from horrendous effects from crypto winter. A state-owned electricity provider in British Columbia has announced it will hold all requests from crypto miners for 18 months. They said that the country needs to develop infrastructure to balance the needs of residents, businesses and digital asset mining.
Last month, Nvidia, a global Graphics Processing Unit (GPU) manufacturer, saw its revenue declining by over 50%. Crypto mining remained one of the core reasons behind the fall. Colette Kress, company’s CFO, said in an investors note that Ethereum blockchain’s transition from PoW to PoS has lowered GPU utility among the miners.
Source: https://www.thecoinrepublic.com/2022/12/23/core-scientific-might-sell-facilities-they-planned-to-use-in-2023/