Cryptocurrency mining firm Core Scientific has taken steps to resolve a protracted legal dispute with lending company Celsius Network. According to a statement released on September 15, Core Scientific has reached an agreement with Celsius Network to sell its Bitcoin-transferring mining data center. In return , Celsius Network will pay $14 million in cash, bringing an end to "all existing litigation" between the two parties. However, this agreement is subject to court approval due to the data center's valuation of around $45 million.
The conflict between Core Scientific and Celsius Network began in October 2022 when Core Scientific alleged that Celsius Network had not settled its outstanding invoices. In response, Celsius Network claimed that Core Scientific had not deployed the mining rig in line with their contractual agreement. Subsequently, both companies filed for Chapter 11 bankruptcy protection in the United States, with Core Scientific filing in Texas in December 2022 and Celsius Network in New York in July 2022.
Should the deal gain approval, the Texas-based data center, which is not yet operational but has the capacity to provide 215 megawatts of power for Bitcoin mining rigs, could fall under the purview of Celsius Network's mining arm. Chris Ferrero, CEO of Celsius Network, noted that in addition to participating in acquiring Celsius Network's assets during the bankruptcy proceedings, cryptocurrency mining company US Bitcoin played a significant role in structuring and executing the transaction.
This lawsuit between the two companies is connected to the criminal charges brought against former Celsius CEO Alex Mashinsky and former Chief Revenue Officer Roni Cohen-Pavon. The outcome of the legal proceedings may have broader implications, as Mashinsky faces charges related to fraud and market manipulation , while Cohen-Pavon recently pleaded guilty to four charges and is awaiting sentencing in December.
