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Core Scientific, a bankrupt bitcoin miner, is protesting against the payment of $4.7 million in executive compensation filed by crypto lending platform Celsius Network. The latest development has resulted in a contractual battle between the two companies.
In a Texas bankruptcy court objection on May 5, Core Scientific demanded that Celsius Network’s $4.7 million administrative claim be dismissed since Celsius failed to demonstrate its rightful ownership.
Furthermore, Core Scientific alleged that it had significant claims against Celsius that went beyond the aforementioned admin claim.
The trouble started when Core Scientific moved additional costs to Celsius, citing higher electricity prices – an allowance that was supposed to be included in the original contract.
The two companies, going through Chapter 11 bankruptcy, have been embroiled in ongoing litigation over their contracts. Core Scientific alleges that Celsius isn’t paying its fees, while Celsius argues that Core Scientific hiked up power rates not specified in their agreement.
Core Scientific’s dissenting opinion paints a bleak picture of the situation. They claim that while Celsius initially paid the fees, it stopped doing so after filing for bankruptcy.
Furthermore, Celsius now owes Core Scientific around $11 million – a hefty sum that accrues $28,000 per day in fees and interest.
On Dec. 28, 2022, Core Scientific made an emergency request to the Southern District of Texas bankruptcy court to reject Celsius Mining’s contracts. Core Scientific claimed that it was losing a staggering $2 million in incremental revenue every month.
On Jan. 3, 2023, Celsius reluctantly agreed to let Core Scientific shut down more than 37,000 Bitcoin mining rigs that it had been storing for crypto lenders.