Celsius and Core Scientific Reach $45 Million Settlement Deal Following Mining Facility Dispute
Digital asset miners Core Scientific and Celsius Mining have struck a $45 million deal over the Cedarvale mining site after months of litigation.
According to the court filing, both companies have resolved to settle all disputes in a deal that they describe as beneficial to the entire mining ecosystem.
The arrangement would see Celsius pay $14 million in cash while the remainder will be due through adjusted claims. The agreement does not cover convertible notes Celsius holds against Core.
Amidst its bankruptcy proceedings, Celcius has agreed to purchase the Texas mining facility in a bid to boost its mining capacity for the benefit of its creditors in the long run.
“We are committed to driving further value to the Celsius estate before emergence and are eager to lead the development of the Cedarvale assets.”
Since both companies are in the middle of bankruptcy proceedings, all agreements reached so far are tentative until approved by the court.
Celsius and Core Scientific delved into a legal battle for months over contractual obligations including multiple filings of fees on the back of several allegations.
Celsius sought to claim $312 million alongside other demands after Core shut down its mining rigs in January citing failure to pay energy bills.
On their part, Core claims that failure to pay the power bills nullifies all contracts as it goes to the root of the agreement which was a major factor in the firm’s bankruptcy declaration.
Per court filings, Core hoped to generate about $2 million each month from the site where it hosted Celsius mining rigs.
Celsius and Core march to a bright future
The crypto winter which has dragged on for months hit miners the hardest according to several analysts as they resulted in selling their Bitcoin (BTC) reserves, selling key assets, restructuring or pivoting to a new model, and worst-case scenario leaving the market.
Both companies have announced plans for expansion amid bankruptcy lawsuits. Adam Sullivan the CEO of Core Scientific stated that the company is pleased to resolve all litigation with Celsius Mining.
“With unwavering focus, we continue to deliver on our commitment to enhance the operational excellence of the organization and emerge from our restructuring process later this year even stronger,” he added.
He further highlighted the company’s three-year growth plan which entails expanding two Texas data centers to remain among the largest Bitcoin miner in North America.
Chris Ferraro the interim CEO of Celsius noted that the firm hopes to improve the capacity of the Cedarvale site and improve its portfolio to 300 megawatts.
The center currently has 215 megawatts of power as well as equipment and would facilitate Celsius arrangements with Fahrenheit LLC, the firm billed to take over the capital and management team of the new company per the bankruptcy agreements.
“This outcome was made possible through the collaboration of Celsius and US Bitcoin Corp, who played a key supporting role in structuring and executing the transaction. We are pleased to settle all existing litigation and look forward to focusing on expanding the Cedarvale capabilities and completing the site,” Ferraro added.