Core Scientific’s bankruptcy plan includes equity stake for Bitmain and Anchorage

Cryptocurrency custody firm Anchorage Digital and major mining manufacturer Bitmain could take equity stakes in Core Scientific as part of the firm’s restructuring plan.

According to an Aug. 8 filing in the United States Bankruptcy Court for the Southern District of Texas, Bitmain plans to sell Core Scientific 27,000 S19j XP Miners in exchange for roughly $23 million in cash and $54 million in company equity through new common interests. In addition, Anchorage Digital was the only company that had lent funds to Core Scientific that chose an equitization option for its claim.

Other firms, including BlockFi and Mass Mutual Asset Finance, opted for their claims to be handled through negotiated settlements. The proposed plan will likely be subject to a vote by creditors before approval, though the debtors said it would reduce its capital needs by more than $30 million by offering equity in lieu of cash and reaching a settlement with Celsius Network.

Related: Core Scientific appoints Adam Sullivan as CEO amid restructuring process

Core Scientific filed for Chapter 11 bankruptcy in December 2022, citing decreased revenue and falling Bitcoin (BTC) prices. The company had been reporting financial issues in the weeks leading up to filing amid the collapse of Celsius and the crypto market crash. The firm had been one of the largest mining companies by hash rate and has continued to mine BTC amid the restructuring process.

Magazine: Bitcoin is on a collision course with ‘Net Zero’ promises

Source: Read Full Article