Feb 04, 2023
Core Scientific to Pay Off $38.6M Debt with Mining Machines
Core Scientific, a crypto mining firm, recently announced that it has reached an agreement with the New York Digital Investment Group (NYDIG) to pay off its outstanding debt of $38.6 million. This payment will be made through the transfer of over 27,000 mining machines used as collateral.
The company has filed a motion with the United States Bankruptcy Court for the Southern District of Texas, which is in charge of the proceedings, seeking approval for the transfer. Core Scientific has accepted that this move will have a negative impact on its revenue, but believes that the long-term benefits of paying off its debt will outweigh the immediate loss.
The firm is now shifting its operations to a smaller and more efficient fleet of mining rigs which were in storage and not mining Bitcoin (BTC). It is also planning to mitigate some of the losses incurred by the transfer of assets by installing the S19 XP mining rigs, which are not currently in use.
Core Scientific had filed for Chapter 11 bankruptcy on Dec. 21, 2020, after revealing that it was going through financial distress in a filing with the Securities and Exchange Commission. The reasons for its financial struggles included increased electricity costs, an increase in the global Bitcoin hash rate, low Bitcoin prices and the Celsius bankruptcy.
On Jan. 31, 2021, the bankruptcy court approved the mining company’s plan to borrow $70 million to replace its existing loan. This loan is being provided by investment bank B. Riley, which is also one of the firm’s creditors.
Core Scientific is now looking to promote and sell its NFTs, and has hired a web3 agency to help it with NFT marketing and promotion. The agency will use Twitter NFT marketing strategies to drive more attention to the NFTs, in order to increase their sales. The company is also exploring other avenues of NFT promotion, such as influencer marketing, to further increase its reach and boost its sales.
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