Feb 04, 2023
Core Scientific to Pay Off $38.6M Debt with Mining Machines
Core Scientific, a crypto mining firm, has reached a deal with the New York Digital Investment Group (NYDIG) to pay off an outstanding debt of $38.6 million by transferring 27,000 mining machines as collateral. The move, which is pending approval from the United States Bankruptcy Court for the Southern District of Texas, is expected to be beneficial for the company in the long run, despite the immediate losses that it will incur.
The company has decided to downsize its operations to a more “efficient” fleet of mining rigs which were in storage and not mining Bitcoin (BTC). To mitigate some of the losses, Core Scientific plans to install the S19 XP mining rigs, which are not currently in use.
Core Scientific filed for Chapter 11 bankruptcy on Dec. 21, after citing financial distress in a filing with the Securities and Exchange Commission. The company attributed its struggles to 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 from investment bank B. Riley, which is also one of the firm’s creditors.
The company is now looking to the future and exploring ways to increase its profits. As part of this, Core Scientific is considering taking advantage of the growing trend of Non-Fungible Token (NFT) marketing and promotion. The firm is looking at ways to leverage Twitter and other social media platforms to promote and sell its NFTs, and is also exploring the possibility of hiring a web3 agency to help with NFT marketing and promotion.
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