In a significant development, Celsius and Core Scientific have reached a $45 million settlement to resolve their contentious mining dispute. The deal, described as “fair, equitable, and carefully negotiated,” ends the protracted litigation between the two companies. The agreement also includes the acquisition of Cedarvale, an 85-acre mining site in Texas, by Celsius. The settlement is pending court approval to become official.
The deal’s components and implications
The Cedarvale mining site in Ward County, Texas, was sold to Celsius for $14 million. Core Scientific, which is also navigating bankruptcy proceedings, relinquished its $31 million worth of claims against Celsius, bringing the total deal amount to $45 million. The mining site is expected to be a crucial part of Celsius’ restructured mining business. The site offers 215 megawatts of available power and comes with designs that will enable Celsius to complete construction.
Background and financial strains
The dispute between the two companies had been escalating for months, particularly after Celsius, the parent company, filed for bankruptcy in July 2022. Core Scientific used to host 37,000 of Celsius Mining’s bitcoin rigs. However, financial difficulties led to Celsius Mining defaulting on fee payments and power bills, according to Core Scientific. The hosting agreement was terminated in January 2023, adding fuel to the already heated battle between the two companies.
Core Scientific CEO Adam Sullivan expressed satisfaction over resolving “all existing litigation” with Celsius Mining. He also indicated that Core Scientific plans to emerge from its restructuring later this year. On the other hand, the acquisition of the Cedarvale site is seen as a significant step for Celsius in reorganizing its mining business. The site is “partially-developed, non-operational,” but with the designs handed over by Core Scientific, Celsius is well-positioned to complete construction and potentially turn its fortunes around.
The settlement marks a pivotal moment for both companies, offering them a chance to move forward without the burden of ongoing litigation. While the deal still requires court approval, it represents a significant step towards resolution and could set a precedent for how similar disputes in the rapidly evolving crypto industry are handled in the future. With both companies looking to restructure and stabilize, the settlement could be the fresh start they need to navigate the complex landscape of cryptocurrency mining and lending.