Feb 04, 2023

Core Scientific to Pay Off $38.6M Debt with 27,000 Mining Machines

Core Scientific, a crypto mining firm, has made a deal with the New York Digital Investment Group (NYDIG) to pay off an outstanding debt of $38.6 million. To do this, the company will hand over more than 27,000 mining machines which were being used as collateral.

The company has filed a motion in the United States Bankruptcy Court for the Southern District of Texas, seeking approval for the transfer of assets. Core Scientific has accepted that the move will have a negative impact on its revenue in the short term, but believes that the long-term benefits of paying off its debt “outweigh the immediate loss.”

The firm is now shifting its operations to a “somewhat smaller, but more efficient” fleet of mining rigs which were in storage and not mining Bitcoin (BTC). To mitigate some of the losses incurred by the transfer of assets, Core Scientific plans to install the S19 XP mining rigs, which are not currently in use.

The crypto mining company filed for Chapter 11 bankruptcy on Dec. 21, 2020. This was after the firm revealed that it was going through financial distress in a filing with the Securities and Exchange Commission. The reasons cited for the financial struggles were increased 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 is from investment bank B. Riley, which is also one of the firm’s creditors.

Core Scientific is now looking to the future and is exploring ways to make the most of the web3 space. The firm is in the process of launching a new NFT marketing agency to help promote and sell NFTs. The company is also looking into ways to use Twitter for NFT marketing and is considering hiring a web3 agency to help with its NFT promotion efforts.

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