Celsius's 37,000 Mining Rigs Shut Off by Core Scientific
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Core Scientific Shuts Down Celsius Mining Rigs
In a new order submitted by Core Scientific on January 3 that included modifications agreeable to Celsius, it was stated that all Celsius machines would be deactivated as of January 3, 2023, and will not be reactivated during the transitional phase.
On October 19, Core Scientific charged Celsius with not paying its electricity bills; subsequently, the Bitcoin miner filed for Chapter 11 bankruptcy on December 21 after alleging the non-payment was a key contributor to liquidity problems.
Permission to Refuse Celsius Contracts
On December 28, Core Scientific submitted a motion asking for permission to reject Celsius' agreements because the company's refusal to pay its electricity bills amounted to a clear violation of the contracts.
The court documents state that Core Scientific would be able to make $2 million per month in income from the area now covered by Celsius' mining rigs if the arrangement were to be terminated. Due to the conditions of the hosting agreement, Core Scientific was able to transfer part of the electricity expenses to Celsius. Since Russia invaded Ukraine, these prices have significantly grown.
Increase in Power Rates
As of December 28, Core Scientific spent approximately $7.8 million addressing the rising power prices, and the miner said it cannot manage to keep carrying the costs of Celsius' outstanding power charges.
The profitability of miners has suffered due to rising production costs at a time when the value of Bitcoin is declining, which has caused the hash price to decline by almost 75% by 2022.