Crypto miner Core Scientific expects to emerge from bankruptcy in January

reuters | December 21, 2023

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(Reuters) -Cryptocurrency miner Core Scientific said on Thursday it was expecting to emerge from bankruptcy in mid-to-late January, a year after it became a casualty of high-profile collapses that led to a rout in crypto tokens.

The Austin, Texas-based company said it has reached an in-principle agreement with all key stakeholders on the terms of a global settlement.

“The global settlement removes key hurdles to our anticipated emergence from Chapter 11 in January,” said CEO Adam Sullivan in a statement.

Core Scientific had filed for bankruptcy protection in December last year, citing slumping bitcoin prices, rising energy costs for bitcoin mining and unpaid debt from U.S. crypto lender Celsius Network, one of its biggest customers.

More than a trillion dollars in value were wiped out from the crypto sector last year with rising interest rates exacerbating worries of an economic downturn.

The crash eliminated key industry players such as crypto hedge fund Three Arrows Capital and Celsius.

The biggest blow came after major crypto exchange FTX filed for bankruptcy protection in November 2022. Its swift fall sparked tough regulatory scrutiny of how crypto firms hold funds and conduct business operations.

Core Scientific said it has rescheduled the confirmation hearing to Jan. 10 and intends to file a motion to modify certain dates, including an extension of the deadlines to vote or file an objection.

Processing bitcoin transactions and “mining” new tokens is done by powerful computers, hooked to a global network, that compete against others to solve complex mathematical puzzles. The business became less profitable as the price of bitcoin fell, while energy costs soared.

Core Scientific was delisted after the bankruptcy proceedings began. It had gone public in mid-2021 through a merger with a blank-check company in a deal that at the time valued the miner at $4.3 billion.

(Reporting by Manya Saini in Bengaluru; Editing by Anil D’Silva and Arun Koyyur)