BTC’s Mining May be Reduced Further

Core Scientific may proceed to disconnect approximately 37,000 BTC mining rigs that it was hosting on behalf of Celsius.

Celsius was once part of the crypto industry and was involved in the business of offering credit facilities to crypto miners. However, the lender defaulted and is currently undergoing liquidation proceedings before a Court.

The Celsius Network became a victim of the Terra Network crash that had taken place in May 2022. The crash resulted in the demise of several crypto-related firms in the industry.

Unfortunately, the Celsius Network did not find itself exempt from the demise and it cost a great fortune to the firm.

On other hand, Core Scientific was also part of the industry and involved in the business of carrying out BTC mining operations. Even Core Scientific is no more as it also has collapsed in 2022.

Celsius Owed Hosting Costs Exceeding $78 Million to Core Scientific

Core Scientific had raised a claim that the defaulted lender Celsius owed money to it.

It was alleged that Celsius was obtaining Core Scientific’s hosting services in which the latter was catering to 37K BTC mining rigs on Celsius’s behalf.

As for hosting costs, an amount of $78 Million was due to be paid to Core Scientific by Celsius. Unfortunately, the Celsius Network filed for bankruptcy and faced a major financial crisis.

Core Scientific’s attorneys informed the Court that Celsius hasn’t paid any amount against the costs since July 2022 to date.

Consequently, Core Scientific has been suffering from a huge financial burden stemming from the non-payment of hosting service charges by Celsius.

Core Scientific’s Proposal before the Court

The attorneys of Core Scientific also told the Court that Core Scientific now wants to suspend its hosting services to Celsius.

In this connection, Core Scientific will be disconnecting 37k BTC mining rigs of Celsius as it will save a substantial amount of money.

If the company is not going to get its money back then it would rather not provide hosting services to the Celsius Network.

Core Scientific’s attorneys proposed that if Celsius’s equipment is leased out then the company can generate $2 Million per month.

The attorneys also told the Court that the funds collected from the lease shall then be used for settling the debts.

There was a time when Core Scientific was highly regarded as one of the major BTC miners in the industry. It was however later found out that over 40% of the miner’s BTC mining capacity was based on hosted rigs.

However, when the economic crunch took over the mining industry, Core Scientific could not continue its mining operations. The miner was then left with no other remedy except for seeking Chapter 11 “bankruptcy” protection.

Core Scientific then proposed that during the pendency of the Chapter 11 proceedings, the miner be allowed to continue its operations.

The purpose behind the continuation of operation was told to be revenue generation and settlement of liabilities.

Celsius Proposal to the Court

On the other hand, Celsius has told the Court that it is willing to disconnect its mining rigs lying in the farms of Core Scientific.

The attorney representing Celsius also informed the Court that Celsius would ensure the revocation of the hosting contract in accordance with the law. He also stated that Celsius does not wish to make dollars by obtaining the services of Core Scientific.

Meanwhile, Celsius has decided to move a motion within this week preferably on the upcoming date of hearing on 10th January 2023.

Through the motion, Celsius seeks Court’s permission in extending the deadline within which a claim can be lodged against Celsius.

Court gave the deadline of 3rd January 2023 and Celsius is hoping to get an extension till the second week of February.

Both, Core Scientific and Celsius, are victims of economic hardships which came hard at them soon after 2021.