Core Scientific denies Celsius’ claim of $4.7 million, stating that Celsius has been unjustly benefited.
The bankrupt Bitcoin mining company, Core Scientific, has opposed a $4.7 million administrative claim made by crypto lender Celsius Network. This disagreement has sparked a dispute between the two companies regarding their contractual responsibilities.
Core Scientific has filed an objection in a Texas bankruptcy court on May 5, stating that Celsius Network’s $4.7 million administrative claims should be dismissed. Core Scientific argues that Celsius Network has not provided sufficient evidence to support its entitlement to such a claim.
The objection stated, “Celsius’ request for immediate payment of their alleged administrative claim overlooks the fact that Core Scientific has significant claims against Celsius, which Core believes are greater in value than the alleged administrative claim by Celsius.”
To provide context, Core Scientific initially entered into a contract with Celsius in 2020 to store Celsius’ cryptocurrency assets in Core’s data centers. However, as the price of power rose, Core transferred these additional expenses to Celsius, which was supposedly permitted under the terms of the original contract.
Core Scientific’s 2020 contract with Celsius Network. Source “cointelegraph”
According to Core Scientific’s objection, Celsius initially covered these expenses. However, after filing for bankruptcy, Celsius stopped making payments, as claimed by Core Scientific.
Core Scientific stated in the objection, “If there is anyone who has unfairly benefited, it is Celsius.” The bankrupt Bitcoin mining company alleges that Celsius has withheld nearly $8 million that it owes to Core. Core Scientific claims that this action by Celsius violates the agreed-upon mechanism for resolving disputes.
According to Core Scientific’s lawyers, Celsius is now said to owe approximately $11 million to the company. This amount continues to increase by $28,000 each day due to fees and interest.
The conflict between Core Scientific and Celsius began on October 19 when Core Scientific accused Celsius of not paying its power bills. These non-payments were a significant factor in the liquidity problems that eventually led Core Scientific, the troubled Bitcoin mining company, to file for Chapter 11 bankruptcy on December 21.
The objection stated that the substantial amount of money that Celsius failed to pay Core after filing for bankruptcy, along with the significant costs incurred in the litigation process, played a major role in draining Core’s financial resources and ultimately led to its filing for Chapter 11 bankruptcy.
On December 28, Core Scientific submitted a request to the court to terminate its contracts with Celsius, arguing that Celsius’ failure to pay for the power bills violated the terms of the agreement. Subsequently, on January 3, Celsius agreed to allow Core Scientific to shut down over 37,000 Bitcoin mining rigs that Core Scientific was hosting for the crypto lender.