Key takeaways:
- An agreement between Celsius Network and Core Scientific has been revealed to end a lengthy legal dispute.
- The dispute between the two companies essentially began in October 2022, when Core Scientific claimed Celsius had not paid its debts.
An agreement between crypto lending company Celsius Network and cryptocurrency mining company Core Scientific has been revealed in order to end a lengthy legal dispute.
In a statement made on September 15, Core Scientific stated that it had consented to sell a Bitcoin mining data center to Celsius in exchange for $14 million in cash to end “all existing litigation.”
A court must approve the transaction before it can be finalized because the Texas data center was valued at about $45 million.
The dispute between the two companies essentially began in October 2022, when Core Scientific claimed Celsius had not paid its debts, and Celsius countered that the mining company had not been deploying rigs as specified in their contract.
In the United States, both businesses independently filed for Chapter 11 bankruptcy protection: Core Scientific in Texas in December 2022 and Celsius in New York in July 2022.
According to reports, the Texas data center was inactive but had a capacity of 215 megawatts to power BTC rigs. If the sale is authorized, it will likely go to Celsius’ mining division.
Chris Ferrero, the CEO of Celsius, claims that US Bitcoin, a crypto mining company, had a “key supporting role in structuring and executing the transaction” in addition to being a participant in a successful bid for Celsius’ assets in bankruptcy proceedings.
Criminal accusations against former Celsius CEO Alex Mashinsky and former chief revenue officer Roni Cohen-Pavon are unrelated to the legal dispute between the two companies. The two former Celsius executives were charged by the US Justice Department in July.
Mashinsky, who was detained in July, has entered a not-guilty plea to allegations of market manipulation and fraud. On September 13, Cohen-Pavon entered a plea of guilty to four offenses; she will be sentenced in December.
