Core Scientific, a bankrupt bitcoin mining company, is protesting the payment of $4.7 million in executive compensation made by crypto lending platform Celsius Network. The latest development has led to a contractual battle between the two companies.
In Texas bankruptcy court objection On May 5, Core Scientific demanded that Celsius Network’s administrative claim of $4.7 million be dismissed because Celsius failed to prove its legitimate ownership.
Furthermore, Core Scientific claimed to have substantial claims against Celsius that exceed the aforementioned official claim.
The problem started when Core Scientific moved the extra costs up to a percentage point, citing higher electricity rates—an allowance that was supposed to be included in the original contract.
The two companies, which are in Chapter 11 bankruptcy, have been embroiled in an ongoing dispute over their contracts. Core Scientific claims Celsius does not pay its fees, while Celsius argues that Core Scientific raised energy rates not specified in its agreement.
Core Scientific’s dissenting opinion paints a bleak picture of the situation. They claim that while Celsius initially paid the fee, it stopped doing so after filing for bankruptcy.
On top of that, Celsius now owes Core Scientific about $11 million – a whopping sum that racks up $28,000 a day in fees and interest.
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On December 28, 2022, Core Scientific filed an emergency motion with the Bankruptcy Court for the Southern District of Texas to have the Celsius Mining contracts dismissed. Core Scientific claimed it was losing $2 million in incremental revenue each month.
On January 3, 2023, Celsius reluctantly agreed to allow Core Scientific to shut down the more than 37,000 Bitcoin mining rigs it had been hoarding for cryptocurrency lenders.