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

Bankrupt Bitcoin (BTC) mining firm Core Scientific has objected to paying a $4.7 million administrative claim put forward by crypto lender Celsius Network, leading to a battle between the firms over contractual obligations.

According to the objection, which was filed in Texas bankruptcy court on May 5, Core Scientific has asked that Celsius Network’s $4.7 million administrative claims be rejected as the firm cannot prove it is entitled to one.

“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,” wrote the objection.

For context, 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 power, Core passed these additional costs on to Celsius, an allowance that was reportedly stipulated in the original contract.

Core Scientific’s 2020 contract with Celsius Network. Source: Court Filing.

Despite Celsius initially paying these costs, the crypto lender ceased payments after it filed bankruptcy, Core Scientific claimed in the objection.

“If anyone has been unjustly enriched here, it is Celsius,” wrote Core Scientific in the objection. According to the now-defunct Bitcoin miner, Celsius has been “sitting on almost $8 million of money it owes to Core” due to a “blatant post-petition violation” of the agreed-upon dispute resolution mechanism.

Related: Bittrex files for Chapter 11 bankruptcy just weeks after SEC charges

In total, Celsius now allegedly owes Core Scientific approximately $11 million, a sum that accrues an additional $28,000 in fees and interest with each passing day, the Bitcoin mining firm’s lawyers argued.

The conflict between the two firms has been raging since Oct. 19, when Core Scientific first accused Celsius of failing to pay its power bills, citing the non-payments as a significant factor in the liquidity issues that led to the embattled Bitcoin miner filing for Chapter 11 bankruptcy on Dec. 21.

“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.”

On Dec. 28, Core Scientific filed a motion seeking approval to reject Celsius’ contracts, claiming the firm’s failure to pay its power 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 was hosting for the crypto lender.

Magazine: How to control the AIs and incentivize the humans with crypto

All Dutch and English crypto news!

Bitcoin price chart flashes a bullish sign that could lead to breakouts in ADA, QNT, RNDR and RPL

The United States equities markets welcomed the debt ceiling deal and the May nonfarm payrolls data on June 2 with strong rallies. The S&P 500...

Atomic Wallet hack losses top $35M, on-chain sleuth reports

At least $35 million worth of crypto assets have been stolen from Atomic Wallet users since June 2, according to an analysis from on-chain sleuth...

Cryptocurrency markets’ low volatility: A curse or an opportunity?

Cryptocurrency markets are well-known for their volatility, where large price swings help investors create or lose fortunes. Yet there are often periods of relative stability...

5 free ChatGPT and generative AI courses

In the realm of technology, becoming proficient in using the most recent generation of generative artificial intelligence (AI) tools has quickly become essential. These tools, like ChatGPT...

Beste exchanges

Koop je crypto bij Bitvavo