Feb 04, 2023
Core Scientific Pays $38.6M Debt with Mining Machines
Core Scientific, a crypto mining firm, has recently made a deal with the New York Digital Investment Group (NYDIG) to pay off an outstanding debt of $38.6 million by handing over more than 27,000 mining machines. The mining rigs were used as collateral and are no longer necessary for the company’s operations and plans. The firm is now waiting for approval from the United States Bankruptcy Court for the Southern District of Texas, which is in charge of the proceedings.
Core Scientific has accepted that the move will have a negative effect on its revenue. However, they believe that the long-term benefits of paying off its debt will be worth the immediate loss. The company is also making the shift to a more efficient fleet of mining rigs which were stored and not used for Bitcoin (BTC) mining. To make up for the losses, Core Scientific plans to install S19 XP mining rigs, which are currently unused.
The crypto mining company filed for Chapter 11 bankruptcy on Dec. 21. This came after the firm revealed its financial struggles in a filing with the Securities and Exchange Commission. The main reasons for the financial distress were increasing electricity costs, an increase in the global Bitcoin hash rate, low Bitcoin prices and the Celsius bankruptcy.
On Jan. 31, the bankruptcy court approved the mining company’s plan to borrow $70 million to replace its existing loan. This loan will be taken from investment bank B. Riley, which is also one of the firm’s creditors.
With the debt settled, Core Scientific is now looking to the future and is actively exploring various opportunities to increase their profits. One of the avenues they are exploring is NFT marketing and promotion. The company is looking to use Twitter as a platform to promote their NFTs and to reach a wider audience. They are also considering hiring a web3 agency to help with the marketing and promotion of their NFTs. By selling NFTs, Core Scientific hopes to make up for the losses they incurred from the transfer of assets and to become more profitable and sustainable.
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