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Bitcoin Mining Firm Core Scientific Is Looking To File For Bankruptcy: Report

According to recent reports, Bitcoin mining company Core Scientific is looking into the possibility of filing for bankruptcy as a result of a group of the company’s convertible bondholders consulting restructuring lawyers. 

In response to a filing with the United States Securities and Exchange Commission that indicated possible economic difficulties, the bondholders of Core Scientific reportedly partnered with the law firm Paul Hastings, as stated in a story published on November 1 by Bloomberg Law. 

The filing made on October 26 indicated that the mining company was unable to meet its financial obligations in late October and early November. The company said that it couldn’t pay its bills because of the low price of Bitcoin, rising electricity costs, a rise in the global BTC hash rate, and legal problems with a cryptocurrency lending company called Celsius

In a court statement that was submitted by Core Scientific on October 19, it was said that Celsius owed the company more than $2.1 million for post-petition expenses, and that Core Scientific would continue to lose around $53,000 per day until its financial commitments were honored. Celsius has responded by saying that the mining company took too long to set up their rigs and gave them less electricity than they needed, which was against the terms of a contract. 

Following the release of the SEC filing, the price of shares of Core Scientific’s stock CORZ on the Nasdaq dropped by more than 87 percent, from $1.01 to $0.17 at the time of publishing. The mining company said that as of the 26th of October, it owned a total of $26.6 million in cash along with 24 BTC, but as of the 30th of June, it owed a total of $880 million in notes due. Since November 1st, the firm has maintained its Bitcoin mining operations.

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Reporter
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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