Core Scientific objects to $4.7 million claim from Celsius Network

• Core Scientific has expressed objection to a $4.7 million administrative expense claim made by Celsius Network.
• The crypto miner reminded the Celsius of the substantial claims it holds against the bankrupt crypto lender.

In a faceoff between bankrupt crypto firms, crypto miner Core Scientific has rejected a multi-million dollar administrative expense claim from crypto lender Celsius Network.

Both firms filed for Chapter 11 bankruptcy last year and are currently navigating complex finances as part of their restructuring efforts. 

Core Scientific highlights substantial claims against Celsius

According to a filing with the U.S. Bankruptcy Court for the Southern District of Texas, Core Scientific has objected to a $4.7 million administrative claim from bankrupt crypto lender Celsius arising from payments made by the latter in previous hosting agreements.

The Bitcoin mining firm stated in the court filing that Celsius failed to sufficiently prove that it is entitled to the administrative expense claim in question.

The bankrupt crypto miner further stated that Celsius ignored existing claims that it has against the lender. Core has claimed that the outstanding dues exceed the alleged administrative claim put forward by Celsius. 

The battle over contractual obligations dates back to December 2020 when Core Scientific and Celsius entered into an agreement.

As per this, the crypto miner would host crypto mining equipment for the crypto lender at one of its data centers.

The hosting agreements required Celsius to pay a certain amount in advance for the hosting services rendered by Core. Following Celsius’ bankruptcy filing in July 2022, the parties got into a dispute over an increase in hosting fees due to higher energy costs. 

Core Scientific argued in the court filing,

“In any case, if anyone has been unjustly enriched here, it is Celsius, which has been sitting on almost $8 million of money it owes to Core due to its blatant post-petition violation of the Hosting Agreements’ clear dispute resolution mechanism, a ploy that only its status as a chapter 11 debtor allowed it to pursue with relative impunity.”