The bitcoin (BTC) mining company goes bankrupt Core Scientific has opposed paying a $4.7 million administrative claim filed by cryptocurrency lender Celsius Network, sparking a battle between the companies over contractual obligations.
According to the objection filed in Texas bankruptcy court on May 5, Core Scientific has asked that Celsius Network’s $4.7 million administrative claim be dismissed because the company cannot demonstrate that it is entitled to one.
“Celsius’ request to admit and immediately pay Celsius’ alleged administrative claim ignores that Core has substantial claims against Celsius, which Core believes outweigh Celsius’ alleged administrative claim,” the objection reads.
To contextualize, Core first signed a contract with Celsius in 2020 to host its cryptocurrency holdings in Core’s data centers. However, due to an increase in the price of energy, Core passed on these additional costs to Celsius, an allocation that was supposedly stipulated in the original contract.
Despite Celsius initially paying these costs, the cryptocurrency lender stopped payments after filing for bankruptcy.alleged Core Scientific in the objection.
“If anyone has been unfairly enriched in this case, it is Celsius,” Core Scientific wrote in the objection.. According to the now-defunct bitcoin miner, Celsius has been “sitting on almost $8 million of money it owes Core” due to a “blatant post-petition violation” of the agreed dispute resolution mechanism.
Celsius now owes Core Scientific a total of approximately $11 million, a sum that accumulates an additional $28,000 in fees and interest with each passing day, argued the lawyers for the bitcoin mining company.
The conflict between the two companies has escalated since October 19, when Core Scientific first accused Celsius of not paying its electricity bills.citing defaults as a significant factor in the liquidity problems that led the bitcoin miner to file for bankruptcy on December 21.
“The millions of dollars that Celsius failed to pay Core after Celsius’ bankruptcy filing plus the millions of dollars in litigation… contributed significantly to Core’s liquidity drain and eventual Chapter 11 bankruptcy filing.”
On December 28, Core Scientific filed a motion seeking approval to reject the Celsius contracts, alleging that the company’s non-payment of energy bills constituted a material breach of contract.. On Jan. 3, Celsius agreed to let Core Scientific shut down more than 37,000 bitcoin mining rigs the miner hosted for the cryptocurrency lender.
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