Celsius's 37k Mining Rigs are Shut Down by Core Scientific
Core Scientific has shut down 37,000 mining rigs that it was hosting for Celsius.
On January 3, Core Scientific filed a revised draft order that included amendments acceptable to Celsius.
Bankrupt cryptocurrency lender Celsius Network has agreed to
Allow Bitcoin miner Core Scientific to shut down more than 37,000 mining rigs. The Core Scientific had been hosting these rigs for Celsius throughout the miner's bankruptcy proceedings.
On January 3, Core Scientific filed a revised draft order that included amendments acceptable to Celsius, indicating that all Celsius rigs will be powered down and will not be reactivated during the transition period.
Core Scientific accused Celsius of failing to pay its power bills on Oct. 19, alleging the non-payment as a major reason for the Bitcoin miner filing for Chapter 11 bankruptcy on Dec. 21.
Core Scientific filed a motion on December 28 seeking authorization to reject Celsius' contracts, stating that the company's refusal to pay its electricity bills constituted a substantial breach of contract.
As per the court filings, the termination of the deal would apparently allow Core Scientific to collect $2 million per month from the space currently held by Celsius' mining equipment.
The terms of the hosting deal permitted Core Scientific to pass on some of the power expenses to Celsius, and those costs have risen significantly since Russia's invasion of Ukraine.
As per the rejection motion, Core Scientific spent about $7.8 million on covering the additional power prices as of Dec. 28, and the miner stated that it cannot afford to continue bearing the burden of Celsius' unpaid power expenses.
The cost of production for miners has climbed while the price of Bitcoin has declined, eroding miners' profits and contributing to the "hash price," which is falling by more than 75% in 2022.
Miners' lack of profitability, combined with the costs connected with growth initiatives, forced many Bitcoin miners to suffer by the end of 2022, and share prices plunged as a result.
This year, Core Scientific's share price has dropped 99.15%, while Iris Energy and Riot Blockchain have dropped by 91.79% and 85.09%, respectively.
