Core Scientific lawyers claim Celsius owes the firm over $11 million.
Core Scientific, a bankrupt Bitcoin (BTC) mining firm, has filed an objection in a Texas bankruptcy court on May 5th, requesting the rejection of Celsius Network's $4.7 million administrative claim.
Core Scientific asserts that Celsius Network cannot prove its entitlement to the claim.
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In the objection, Core Scientific highlighted that "Core <also> has substantial claims against Celsius."
Celsius’ request for allowance and immediate payment of the Celsius alleged admin claim ignores that Core has substantial claims against Celsius, which Core believes exceed the Celsius alleged admin claim.
It is worth noting that the partnership between Core Scientific and Celsius started back in 2020 when Core agreed to host the crypto lender's cryptocurrency holdings in its data centers.
When power prices surged, Core passed the increased costs onto Celsius, which was allegedly included in the original contract terms. While Celsius initially covered these additional expenses, the crypto lender stopped payments after filing for bankruptcy.
In its objection, Core Scientific points the finger back at Celsius, stating:
If anyone has been unjustly enriched here, it is Celsius.
The defunct Bitcoin miner accuses Celsius of owing nearly $8 million to Core due to a "blatant post-petition violation" of the agreed-upon dispute resolution mechanism. According to Core Scientific's legal team, Celsius now owes Core Scientific around $11 million, with an additional $28,000 in fees and interest added daily.
This conflict dates back to October 19th, when Core Scientific initially accused Celsius of not paying its power bills, blaming the unpaid bills for the liquidity issues that ultimately led to the troubled Bitcoin miner's Chapter 11 bankruptcy filing on December 21st. Core's objection argues:
The millions of dollars Celsius shortchanged Core after Celsius's bankruptcy filing plus the millions of dollars in litigation <…> significantly contributed to Core's liquidity drain and eventual Chapter 11 filing.
At the end of December 2022, Core Scientific filed a motion to reject Celsius' contracts, alleging that the crypto lender's failure to pay power bills constituted a material breach of contract.
On January 3rd, Celsius agreed to let Core Scientific shut down over 37,000 Bitcoin mining rigs that it hosted for the crypto lender.
As the battle over this $4.7 million claim rages on, both Core Scientific and Celsius Network seem to have their work cut out for them in sorting through this messy financial dispute.
