According to some recent court documents, on January 25 the defunct Bitcoin mining company Core Scientific filed an emergency application asking for permission to sell Bitmain vouchers with a total value of $6.6 million.
As stated in the petition, there are various restrictions that have been attached to the coupons that render them worthless for the operations of Core Scientific.
To be more specific, the coupons may only be used to pay 30% of any new order of S19 Miners placed with Bitmain. They cannot be traded in for cash with Bitmain under any circumstances.
Core Scientific says crypto winter affected the miners
According to the filing, the crypto winter was responsible for a surge in the number of S19 Miners that were placed up for sale on the secondary market, which led to a decline in pricing.
As a consequence of this, recent transactions on the Coupon Exchange using S19 Miner coupons have taken place at prices ranging from 15% to 25% of the coupon’s face value.
As for the coupons, they can only be used for S19 devices, which have a lower hash rate output compared to more current models produced by Bitmain.
The firm made the assertion that the Debtors do not think that using their liquidity to acquire additional S19 Miners is the best use of the Debtors’ funds, even with the availability of the Bitmain Coupons.
In addition, the Bitmain coupons will no longer be valid between March and April of 2023, which is about when the business thinks that it will have exited from its Chapter 11 restructuring.
Also, Core Scientific said that it would not buy any new S19 miners while it is operating under Chapter 11 or after it emerges from that chapter.
Moreover, the crypto firm said has been in negotiations with Bitmain and two possible third parties that are interested in purchasing the vouchers at a steep discount.
Specifically, the selling of $1.9 million worth of Bitmain coupons for $285,000 and the sale of $4.8 million worth of coupons for about $713,000, both of which represented roughly 15% of the full price of the coupons sold.
Core dismantled Celsius’s mining rigs
In a related development, just a few weeks ago, the Bitcoin miner announced that in accordance with a deal reached between the two failing businesses, it intends to put a stop to the operation of 37,000 bitcoin mining machines that had belonged to the crypto lender Celsius.
In light of the fact that Celsius has been unable to make the periodic payments required by the hosting contract, Core Scientific is entitled to roughly $7.8 million in compensation for the energy and hosting expenses it has incurred.
The attorneys who represent Core Scientific argue that turning off the bitcoin mining equipment would result in significant cost savings for the company and that the business has the potential to earn $2 million per month by renting the hosting seats to another mining operation.
