• Core Scientific, a bankrupt BTC miner, has agreed to transfer over 27,000 of its mining rigs to NYDIG in order to pay off an outstanding debt of $38.6 million.
• The company borrowed $77.5 million from the investment management firm in 2020 to expand its business but could not settle the loan at the end of 2022 due to shrinking revenue caused by the bear market.
• The deal needs to be approved by the relevant magistrates before becoming official.
Core Scientific Borrowed Millions
Core Scientific, a prominent bitcoin miner, borrowed $77.5 million from New York Digital Investment Group (NYDIG) in 2020 to expand its business. However, it stopped settling the debt towards the end of 2022 due to shrinking revenue caused by the bear market and net losses climbed up to $1.7 billion as of Q3 2022.
Agreement with NYDIG
The once-prominent bitcoin miner Core Scientific inked an agreement with NYDIG wherein it agreed to transfer over 27,403 of its mining machines and thus pay off an outstanding debt of $38.6 million for which final approval is still pending from relevant magistrates.
Selling Bitcoin Stash
Core Scientific sold nearly 8,000 BTC (almost its entire stash) during this period in order to stay afloat but that could not halt their freefall due low price of primary cryptocurrency (compared to 2021 bull run) and rising energy costs .
Filing For Bankruptcy Protection
The company filed for bankruptcy protection a few days before Christmas 2022 and thus reached an agreement with NYDIG according which it will give 18% of its total rigs for erasing multi-million loan amounting upto $38.6 million .
Conclusion
Core Scientific had taken a loan from NYDIG back in 2020 for expanding their business however due bear market situation they were no longer able settle their debt on time leading them file for bankruptcy protection and handing over almost 18%of their mining rigs as part payment towards loan amounting upto $38.6 Million .