Celsius to store 20,000 mining machines, remains optimistic about new hosting sites

Quick Take

  • Bankrupt lender Celsius said that it will temporarily store about 20,000 mining rigs retrieved from Core Scientific’s hosting facility while it looks for other opportunities.
  • Core Scientific was allowed by a judge to turn off all of Celsius Mining’s machines.
  • Celsius said the current turnaround in market trends “provided support for margin and cash flows.”

The mining arm of bankrupt lending firm Celsius will temporarily store 20,000 rigs it's retrieving from Core Scientific and is optimistic about finding new hosting locations.

The company has already started the process of taking back 37,500 machines after a judge allowed Core Scientific to turn them off earlier this month. It expects to finish the process by mid-March, said Chris Ferraro, who is operating as chief restructuring officer and interim CEO.

"There are options for hosting in the market that will allow us to continue mining with positive operating cash flows and significant upside," Ferraro said in the hearing.

Celsius had been in conflict with Core Scientific — which also filed for bankruptcy last month — over the terms of a hosting agreement, with the former filing a motion to enforce an automatic stay in September. Core, however, claimed that Celsius was "using its Chapter 11 proceeding to withhold payment of certain charges."

Last month, Core Scientific got the green light from its bankruptcy judge to power off all of Celsius' machines. Celsius is also one of Core Scientific's note-holders.

The current environment has been disastrous for miners. Lower cryptocurrency prices and higher energy costs squeeze margins, and forced several companies to file for bankruptcy.

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

Ferraro said that Celsius' liquidity has improved with the recent rise in the price of bitcoin. There has also been a "tremendous decline" in energy costs after peaking in the fall. Bitcoin has recently been trading at around $23,000, the highest since last summer.

"Given the favorable market trends in energy prices and the improving price of bitcoin, we believe that there are options for hosting in the market that will allow us to continue mining with positive operating cash flows and significant upside," Ferraro said. "That's provided support for margin and cash flows."

The company is currently mining 7 to 8 BTC per day at a margin of 25% to 30%, with 27,500 machines hashing.

Ferraro said that 2,150 rigs have been removed from Core Scientific's facilities, while an additional 3,750 will be picked up this week and 2,700 next week. The company will send 6,000 machines to a site in Texas, and 10,000 to bitcoin miner Mawson Infrastructure's site in Pennsylvania.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Catarina is a reporter for The Block based in New York City. Before joining the team, she covered local news at Patch.com and at the New York Daily News. She started her career in Lisbon, Portugal, where she worked for publications such as Público and Sábado. She graduated from NYU with a MA in Journalism. Feel free to email any comments or tips to [email protected] or to reach out on Twitter (@catarinalsm).

Editor

To contact the editors of this story:
Christiana Loureiro at
[email protected]
Walden Siew at
[email protected]