Core Scientific to Pay Outstanding Debt with Mining Machines

The New York Digital Investment Group (NYDIG) and the cryptocurrency mining company Core Scientific came to an agreement wherein Core Scientific would pay off an outstanding debt of $38.6 million by giving over more than 27,000 mining devices that were used as collateral.

The corporation said in a document submitted to the court that the mining rigs were no longer necessary to its operations and future plans. The company is now awaiting clearance from the United States Bankruptcy Court for the Southern District of Texas, which is in control of the procedures at this point.

Core Scientific emphasised that the long-term advantages of paying off its debt “outweigh the immediate loss,” despite the fact that the business acknowledged that the action would have a detrimental effect on the company’s sales. The company that mines cryptocurrencies views the move as the first step toward becoming more lucrative and sustainable in the long run.

Additionally, the company is transitioning its operations to a fleet of mining rigs that it describes as “slightly smaller, but more efficient.” These mining rigs had been stored away and were not actively mining Bitcoin (BTC). The business intends to reduce some of the losses sustained as a result of the transfer of assets by putting into operation the S19 XP mining rigs that are not being used at the present time.

On December 21st, the cryptocurrency mining firm filed its Chapter 11 bankruptcy petition. A number of months had passed since the firm disclosed in a statement with the Securities and Exchange Commission that it was going through a difficult financial period before this file was made. The firm said at the time that its financial difficulties were due to higher power costs, an increase in the worldwide Bitcoin hash rate, low Bitcoin values, and the bankruptcy of Celsius.

The mining company’s attempt to replace its current credit with a new loan worth $70 million was given the go-ahead by the bankruptcy court on January 31. Because of this, the investment bank B. Riley, which is also one of Core Scientific’s debtors, will now be able to provide the company with a loan.