Cryptocurrency News

Celsius and Core Scientific propose $14M settlement for litigation

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Crypto mining firm Core Scientific has announced an agreement with lending company Celsius Network to settle a legal battle which had been ongoing for months.

In a Sept. 15 announcement, Core Scientific said it had agreed to sell a Bitcoin (BTC) mining data center to Celsius in exchange for $14 million in cash to settle “all existing litigation”. The value of the Texas-based data center was roughly $45 million, and the deal will need court approval before being finalized.

The conflict between the two firms largely started in October 2022, when Core Scientific alleged Celsius had failed to pay its bills, while Celsius claimed the mining firm had not been deploying rigs as required under their contract. Both firms separately filed for Chapter 11 bankruptcy protection in the United States: Core Scientific in Texas in December 2022 and Celsius in New York in July 2022. 

Sept. 14 court filing on the proposed settlement between Core Scientific and Celsius. Source: Stretto

The Texas data center, which will likely go to Celsius’ mining arm if the deal is approved, was reportedly non-operational but capable of supplying 215 megawatts to BTC rigs. According to Celsius CEO Chris Ferrero, crypto mining firm US Bitcoin played a “key supporting role in structuring and executing the transaction” in addition to being a party to a winning bid for Celsius’ assets in bankruptcy proceedings.

Related: ‘Unjustly enriched’ — Core Scientific knocks back $4.7M claim from Celsius

The litigation between the two firms is separate from the criminal charges against former Celsius CEO Mashinsky and former chief revenue officer Roni Cohen-Pavon. Mashinsky was arrested in July and has pleaded not guilty to charges related to fraud and manipulating the market. Cohen-Pavon pleaded guilty to 4 charges on Sept. 13 and will be sentenced in December.

Magazine: Get your money back: The weird world of crypto litigation