Bankrupt Bitcoin (BTC) mining firm Core Scientific is in a dispute with crypto lender Celsius Network over a $4.7 million administrative claim. According to an objection filed in Texas bankruptcy court on May 5, Core Scientific has requested that Celsius Network’s claim be rejected as the firm cannot prove it is entitled to one. Core Scientific argued that it has substantial claims against Celsius that exceed the amount of the alleged admin claim. The conflict between the two firms began in Oct. 2020 when Core Scientific first accused Celsius of failing to pay its power bills.
Core Scientific and Celsius first signed a contract in 2020 to host cryptocurrency holdings for Celsius in Core’s data centers. Core passed on additional power costs to Celsius, which was stipulated in the original contract. Celsius initially paid these costs but later ceased payments after filing for bankruptcy. Core Scientific claims that Celsius owes it almost $8 million and that the firm has breached the agreed-upon dispute resolution mechanism.
The Bitcoin mining firm’s lawyers argued that Celsius owes Core Scientific around $11 million, including approximately $28,000 in fees and interest that accrues each day. On Dec. 28, 2020, Core Scientific filed a motion seeking approval to reject Celsius’ contracts for a material breach of contract.
On Jan. 3, 2021, Celsius agreed to let Core Scientific shut down over 37,000 Bitcoin mining rigs that the miner was hosting for the crypto lender. The conflict between the two firms has contributed to Core Scientific’s liquidity drain and eventual Chapter 11 filing.