Core Scientific, a cryptocurrency miner based in Austin, Texas, anticipates emerging from bankruptcy by mid-to-late January, marking a recovery from the turmoil triggered by significant collapses affecting crypto tokens.
Following a year of challenges stemming from the crypto market’s downturn, Core Scientific has secured an in-principle agreement with major stakeholders, clearing significant obstacles for its upcoming exit from Chapter 11. CEO Adam Sullivan expressed optimism, stating, “The global settlement paves the way for our expected emergence in January.”
The company sought bankruptcy protection in December last year, citing various factors, including declining bitcoin prices, increased energy expenses for mining, and unsettled debts from U.S. crypto lender Celsius Network, a prominent client.
The crypto sector experienced a substantial decline in value last year, further amplified by concerns about an economic downturn due to rising interest rates. This downturn impacted significant players like crypto hedge fund Three Arrows Capital and Celsius.
The collapse of major crypto exchange FTX in November 2022 intensified regulatory scrutiny on fund handling and operational procedures within crypto firms. Core Scientific has adjusted its schedule, rescheduling the confirmation hearing to January 10 and seeking modifications in deadlines for voting or objections.
The crypto mining process involves solving complex mathematical puzzles through powerful computers connected to a global network. However, this business became less lucrative with the drop in bitcoin prices and a surge in energy expenses.
Following the bankruptcy initiation, Core Scientific was delisted. In mid-2021, it had gone public through a merger, valuing the miner at $4.3 billion at the time.
