This article comes fromReuters, original author: Dietrich Knauth
Odaily Translator |
Odaily Translator |
Bitcoin miner Core Scientific won court approval on Thursday to secure a $37.5 million loan from a group of existing creditors to fund its Chapter 11 bankruptcy.
U.S. Bankruptcy Judge David Jones provisionally approves Core Scientific's bankruptcy loan during a court hearing in Houston, Texas. Core Scientific will seek final approval for the loan and approval to borrow an additional $37.5 million in January. But Core Scientifi's lawyers said the company was open to better financing options from other lenders.
Kris Hansen, who provided the new loan on behalf of the creditors, said in court that despite Core Scientific's recent challenges and falling bitcoin prices, existing stakeholders remain confident in the company's long-term viability.
After experiencing rapid gains in 2020 and 2021, the price of bitcoin has fallen by more than 60% this year, putting pressure on the encryption mining industry.
Austin, Texas-based Core Scientific filed for bankruptcy on Wednesday, blaming it on a sharp drop in the price of bitcoin, rising energy costs for bitcoin mining and a $7 million outstanding debt from one of its biggest customers, U.S. cryptocurrency lender Celsius Network. .
The company said in court filings that it will not go into liquidation and intends to restructure with the support of creditors who own more than 50% of the company's convertible notes.
It is reported that Core Scientific is one of the largest cryptocurrency mining companies in the United States, and conducts bitcoin mining for itself and customers. Its customers include Celsius Mining, which hosts mining machines on Core Scientific's mine farm.
Celsius, which filed for Chapter 11 bankruptcy in July, has argued that U.S. bankruptcy law prevents Core Scientific from charging it higher electricity rates under the two companies’ bitcoin mining agreement. Now that Core Scientific is also bankrupt, lawyers for both companies said at the hearing that they want to resolve the dispute.
Celsius’s attorney, Chris Koenig, said Celsius took Core Scientific’s long-term future very seriously.
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