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Home ยป Celsius Network and Core Scientific Reach $14M Settlement in Ongoing Litigation

Celsius Network and Core Scientific Reach $14M Settlement in Ongoing Litigation

Crypto Firms Agree on Settlement Involving Bitcoin Mining Data Center

by Isaac lane
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Crypto lending company Celsius Network and crypto mining firm Core Scientific have reached a proposed settlement in an ongoing legal dispute. The agreement, subject to court approval, entails Celsius purchasing a Bitcoin mining data center from Core Scientific for $14 million, effectively resolving all existing litigation.

Resolution of Lengthy Legal Battle

The conflict between the two companies originated in October 2022 when Core Scientific alleged that Celsius had failed to fulfill its financial obligations. In response, Celsius claimed that Core Scientific had not met its contractual obligations related to rig deployment. As a result of these disputes, both firms filed for Chapter 11 bankruptcy protection in the United States: Core Scientific in Texas in December 2022 and Celsius in New York in July 2022.

Bitcoin Mining Data Center Acquisition

As part of the settlement, Core Scientific has agreed to sell a Bitcoin mining data center, initially valued at approximately $45 million, to Celsius for $14 million in cash. The deal is contingent upon court approval before it can be finalized. If approved, the non-operational Texas-based data center, capable of supplying 215 megawatts to BTC rigs, is expected to become a part of Celsius’ mining division.

Celsius CEO Chris Ferrero acknowledged the role of crypto mining firm US Bitcoin, which played a pivotal role in structuring and executing the transaction. US Bitcoin was also involved in a successful bid for Celsius’ assets during bankruptcy proceedings.

Separate from Criminal Charges

It’s important to note that the ongoing litigation between Celsius Network and Core Scientific is distinct from the criminal charges faced by former Celsius CEO Alex Mashinsky and former Chief Revenue Officer Roni Cohen-Pavon. In July, Mashinsky was arrested and has pleaded not guilty to charges related to fraud and market manipulation. On September 13, Cohen-Pavon pleaded guilty to four charges and is awaiting sentencing in December.

 

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