Feb 04, 2023
Core Scientific To Pay Off $38.6M Debt With Mining Machines
Core Scientific, one of the world’s top crypto mining firms, has taken a big step towards becoming more profitable and sustainable by reaching an agreement with the New York Digital Investment Group (NYDIG) to pay off an outstanding debt of $38.6 million. To do this, the company will be transferring more than 27,000 mining machines as collateral.
The move was approved by the United States Bankruptcy Court for the Southern District of Texas, which is in charge of the proceedings. Although the transfer of assets may have a negative impact on the company’s revenue, Core Scientific believes that the long-term benefits of paying off its debt will outweigh the immediate loss.
The company is also transitioning to a smaller, but more efficient, fleet of mining rigs. The rigs have been in storage and are not currently mining Bitcoin (BTC). To mitigate some of the losses incurred, Core Scientific plans to install the S19 XP mining rigs that are not currently in use.
Core Scientific filed for Chapter 11 bankruptcy on December 21, 2020. This followed months of financial distress, which the company attributed to increased electricity costs, an increase in the global Bitcoin hash rate, low Bitcoin prices and the Celsius bankruptcy.
On January 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 the investment bank B. Riley, which is also one of Core Scientific’s creditors.
As Core Scientific moves forward with its plans to pay off its debt and become more profitable, the company is looking to explore opportunities in the NFT space. The firm is already working with a web3 agency to explore NFT marketing and promotion opportunities. This includes exploring the potential of Twitter NFT marketing and setting up an NFT marketing agency.
The company is also looking to capitalize on the growing interest in NFTs by selling its own NFTs. Core Scientific is confident that these efforts will help the company become more profitable and sustainable in the long run.
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