Celsius Mining Owes $5.4 Million In Hosting Fees Says Core Scientific, Crypto Miner After Legal Recovery

Ethereum World News
Ethereum World News October 12, 2022
Updated 2022/10/12 at 3:09 PM
3 Min Read

Summary:

  • Core scientific intends to pursue a claim against bankrupt crypto lender Celsius and the company’s mining business.
  • A filing with the U.S. Securities and Exchange Commission on Wednesday said Core Scientific plans to “vigorously defend its interests” during the ongoing bankruptcy proceedings.
  • The crypto miner claims that Celsius Mining owes around $5.4 million for hosting services.
  • Legal counsel for the troubled crypto lender previously argued that Core Scientific violated bankruptcy protection by debt recovery.

Core Scientific submitted a filing with the U.S. Securities and Exchange Commission (SEC) on Wednesday in line with the company’s plan to recover $5.4 million owed by Celsius Mining, the digital asset mining business attached to the bankrupt crypto lender.

The company runs crypto mining operations as well as hosting services as part of its revenue generation strategy. Prior to its chapter 11 bankruptcy filing in July 2022, Celsius and Core Scientific had an agreement where Core Scientific provided crypto hosting for the lender’s mining business.

According to the filing, the hosting fees amount to $5.4 million but the lender has been unable to meet the payment obligation due to financial difficulties following exposure to Terra’s tokens. Core Scientific asked the beleaguered lender to settle the debt, taking legal action towards this effect.

In response, Celsius’ lawyers argued during proceedings that the crypto miner is in violation of the stay protection provided by the chapter 11 bankruptcy filing. The filing restricts creditors from pursuing immediate legal redress until the court decides otherwise.

Core Scientific denied the violation claims and said the crypto miner intends to “vigorously defend its interests”, per Wednesday’s SEC filing. Core has also hired lawyers towards seeking a “resolution from the bankruptcy court and payment of any outstanding amounts owed under the Agreement”.

Celsius In Legal Battle After Bankruptcy Filing

Core Scientific is one of many claimants in the Celsius bankruptcy case. The crypto lender reportedly owes over $1.2 billion to creditors at press time. Recent financial documents submitted to the South District of New York court in charge of the case also revealed several withdrawals made by former CEO Alex Mashinsky and two other top-ranking executives.

Another batch of records provided to the court details the names and trading history of the platform’s users, essentially doxxing several crypto users. The 14,000-page document is available for public viewing on the Internet Archive.

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