Home » Celsius agrees to turn off its 37,000 mining machines at Core Scientific

Celsius agrees to turn off its 37,000 mining machines at Core Scientific

by Thomas

After months of conflict between the two now-bankrupt companies, Celsius Network has finally agreed to let Core Scientific turn off the 37,000 cryptocurrency mining machines they own but haven’t paid rent on in months.

Agreement reached between Celsius and Core Scientific

It looks like we are nearing the end of a battle that has been dragging on for months. In a document filed on 3 January in the US Bankruptcy Court in Texas, Core Scientific said it had reached an agreement with Celsius Network that “all Celsius mining devices will be powered down as of 3 January 2023”.

Core Scientific will be responsible for unplugging and dismantling the mining rigs. The agreement allows a Celsius employee to observe the operations for a four-hour window each day. They will have up to 75 days to report any material damage to the machines.

As a reminder, Celsius Network and Core Scientific filed for bankruptcy during 2022 – on 13 July and 21 December respectively – and are now under the protection of Chapter 11 of US law. But what is actually happening between the two companies?

In 2020, Celsius Mining (a subsidiary of Celsius Network dedicated to cryptocurrency mining) signed an agreement with Core Scientific. In exchange for rent and full cost coverage (from installation to electricity), Core Scientific agreed to supply, install and maintain Celsius’ 37,000 mining machines.

However, since its bankruptcy, Celsius has been unable to meet its payments. With the recent rise in energy prices and the fall in the price of Bitcoin (BTC), Core Scientific has been left with a hefty bill to pay.

$2 million in losses per day

In practical terms, Core Scientific was forced to go to bankruptcy court to find a solution. Under Chapter 11 of the US law, creditors are no longer able to collect debts from the bankrupt debtor without going to court.

However, as of 21 December, Core Scientific is itself in a bankruptcy situation. As an emergency measure, the mining company asked the Texas court to reject Celsius Mining’s contracts, arguing that they result in energy losses of almost $30,000 per day and a loss of revenue of $2 million per month.

In its response, Celsius stated that it agreed to cancel the contracts and take back its machines, but that it disagreed with Core Scientific’s haste to do so. Indeed, the two working day notice – only – does not allow Celsius to organise itself properly and the company “would have accepted that its machines were simply cut off” while it acted.

Extract from Celsius Mining and Core Scientific contract

Extract from Celsius Mining and Core Scientific contract


The rest of the debate is currently focused on the fact that Core Scientific has drastically increased its management fees – and in particular those related to electricity – even though the contract specifies a fixed and not a variable amount. For the time being, both entities are sticking to their positions and it will be up to the court to decide.

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