Core Scientific will repay debt of 38 million with mining equipment
2023.02.03 10:58
Core Scientific will repay debt of 38 million with mining equipment
By Tiffany Smith
Budrigannews.com – Core Scientific, a company that mines cryptocurrencies, reached an agreement with the New York Digital Investment Group (NYDIG) to pay off a debt of $38.6 million by giving up more than 27,000 mining machines that were used as collateral.
The business claimed in a court filing that the mining rigs were no longer necessary for its plans and operations. The company is currently awaiting the approval of the bankruptcy court in charge of the proceedings, the United States Bankruptcy Court for the Southern District of Texas.
Core Scientific emphasized that the long-term advantages of paying off its debt “outweigh the immediate loss,” despite the fact that the company acknowledged that the move would have a negative impact on its revenue. The transfer, according to the crypto-mining company, is the first step toward becoming more sustainable and profitable.
Additionally, the company is relocating its operations to what it describes as a fleet of mining rigs that are in storage and are not mining Bitcoin (BTC). The company intends to install the S19 XP mining rigs, which are not currently in use, to reduce some of the losses caused by the transfer of assets.
On December 21, the crypto mining company filed for Chapter 11 bankruptcy. In a filing with the Securities and Exchange Commission, months earlier, the company disclosed that it was experiencing financial difficulties. At the time, the company blamed its financial woes on rising electricity costs, an increase in the global Bitcoin hash rate, low Bitcoin prices, and the Celsius bankruptcy.
The mining company’s plan to borrow $70 million to replace its existing loan was approved by the bankruptcy court on January 31. Core Scientific can now obtain a loan from investment bank B. Riley, which is also a creditor of the company.
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