Core Scientific To Switch Off Celsius’ Miners, Freeing Space for Other Clients

Celsius owes the Texas-based miner some $7.8 million for power costs

article-image

Source: Shutterstock / Mark Agnor, modified by Blockworks

share

Cryptocurrency miner Core Scientific said it can’t continue to bear the daily loss of keeping Celsius as a client, and so it’s ending a hosting agreement with the crypto lender. 

The miner told a US bankruptcy court on Tuesday that it will power down more than 37,000 Celsius rigs spread across its facilities on Jan. 3. All rigs will be transported to Celsius at the bankrupt lender’s own cost before March 18. 

Core Scientific is associated with hosted mining, allowing third parties to pay a fee for rigs they purchase depending on their power usage. 

The parties had an arrangement where Celsius would pay for its own power costs, but the company refused to pay some $7.8 million owed through Nov. 31, Core’s lawyers said in court papers.

Core Scientific hosts mining machines for about 15 customers, while operating their own machines as well. Demand for hosting far exceeds Core’s capacity, meaning that the miner was waiting to free up some of its rack space for other clients. 

Core provided hosting space to 41% of its total fleet (or 100,000 servers) as of Oct. 31, according to a company update.

Soaring electricity costs have caused a huge nuisance for crypto miners, squeezing their profit margins, as a combination of extreme weather conditions and Russia’s Ukrainian invasion have driven up prices. 

Core itself filed for bankruptcy in December, partly blaming Celsius’ non-payments for its own liquidity woes. 

Lawyers argue that terminating the Celsius contracts could generate about $2 million in revenue per month, as the same hosting space would be used for other, more willing customers.

Core further established that continuing the Celsius contracts would mean losing money every day, putting the monthly figure at nearly $895,000 in December. 

If the miner decides to use the space for its own operations, that could generate 400 bitcoin per month at an assumed price of $16,700, producing $2 million in revenue, according to its own estimates.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

kamino cover.jpg

Research

Kamino has solidified its position as the leading money market on Solana and is emerging as a DeFi bluechip. Although DeFi competition is fierce, Kamino has kept iterating on its product to provide the best-in-class UX, paired with a robust risk management framework and battle-tested infrastructure. Given the rollout of Kamino Lend V2, the protocol may scale aggressively over the coming months, penetrating previously untapped markets in Solana DeFi.

article-image

Also in the tokenized fund space, Franklin Templeton launches on Base and Securitize hits $1 billion in tokenized RWA onchain

article-image

It turns out that bitcoin never actually hit an all-time high in March. Thanks a lot, inflation.

article-image

Spire, Citrea and Nillion also announced raises this week

article-image

The latest recipient of an SEC Wells notice is a Web3 gaming company

article-image

Thursday’s selloff was led by tech stocks, triggered by disappointing outlooks from giants Meta and Microsoft

article-image

Historically, positive returns have been a bit more of a toss-up during the year’s 11th month