Crypto mining firm Core Scientific and lending company Celsius Network have reached a settlement to end their long-standing legal dispute. This agreement, subject to court approval, involves the purchase of a $45-million mining data center by Celsius for $14 million in cash.
Background
The conflict between these two industry players began in October 2022 and has since been a matter of contention. Core Scientific had accused Celsius of failing to meet its financial obligations, while Celsius argued that Core Scientific was not fulfilling its contractual requirements, particularly regarding rig deployment.
Furthermore, these disputes led both companies to file for Chapter 11 bankruptcy protection in the United States. Core Scientific filed in Texas in December 2022, and Celsius followed suit in New York in July 2022.
The Settlement
Core Scientific’s announcement on September 15 reveals that they have agreed to sell a Bitcoin mining data center, originally valued at $45 million, to Celsius Network. In exchange for the data center, Celsius will pay $14 million in cash. This transaction aims to resolve “all existing litigation” between the parties.
However, it’s important to note that the deal is contingent on court approval and will undergo a legal review.
Key Players and Potential Impact
Celsius CEO Chris Ferrero mentioned that crypto mining firm US Bitcoin played a pivotal role in facilitating and executing this transaction. US Bitcoin was also a party to the successful bid for Celsius’ assets during the bankruptcy proceedings. Their involvement highlights the collaborative efforts in reaching this settlement.
The Texas-based data center, which may become part of Celsius’ mining operations if the deal is finalized, possesses the capability to provide 215 megawatts of power to Bitcoin rigs. This acquisition could significantly bolster Celsius’ presence in the crypto mining industry, pending approval.
Separate Legal Matters
It’s important to distinguish this settlement from the criminal charges against former Celsius CEO Alex Mashinsky and former Chief Revenue Officer Roni Cohen-Pavon. Mashinsky, who was arrested in July, has pleaded not guilty to charges related to fraud and market manipulation. In contrast, Cohen-Pavon recently pleaded guilty to four charges on September 13 and awaits sentencing in December.
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