“Unjustly enriched:” Core Scientific hits back at Celsius’ $4.7 million claim
Bankrupt Bitcoin (BTC) mining company Core Scientific has objected to paying a $4.7 million administrative claim made by crypto lender Celsius Network, sparking a battle between the firms over contractual obligations.
According to the motion, which was filed in Texas bankruptcy court on May 5, Core Scientific has asked that Celsius Network’s administrative claim for $4.7 million be dismissed, as the firm cannot prove it is entitled to one.
“Celsius’ request for indemnification and immediate payment of Celsius’ alleged admin claims ignores that Core has substantial claims against Celsius, which Core believes exceed Celsius’ alleged admin claims,” the objection wrote.
For context, Core first signed a contract with Celsius in 2020 to host its cryptocurrency holdings in Core’s data centers. However, due to an increase in the price of power, Core passed these additional costs on to Celsius, a quota that was allegedly stipulated in the original contract.
Despite Celsius initially paying those costs, the crypto lender halted payments after it filed for bankruptcy, Core Scientific claimed in the objection.
“If anyone has been unjustly enriched here, it is Celsius,” Core Scientific wrote in the objection. According to the now-defunct Bitcoin miner, Celsius is “sitting on nearly $8 million it owes Core” due to a “clear, post-petition violation” of the agreed dispute resolution mechanism.
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In total, Celsius now owes Core Scientific about $11 million, a sum that accrues an additional $28,000 in fees and interest with each passing day, the Bitcoin miner’s lawyers claimed.
The conflict between the two firms has been ongoing since Oct. 19, when Core Scientific first accused Celsius of failing to pay its utility bills, citing non-payments as a significant factor in the liquidity problems that led the struggling Bitcoin miner to file for Chapter 11 bankruptcy 21 Dec.
“Millions of dollars Celsius shorted Core after Celsius’ bankruptcy filing plus millions of dollars in litigation … contributed significantly to Core’s liquidity drain and eventual Chapter 11 filing.”
On Dec. 28, Core Scientific filed a motion for leave to dismiss Celsius’ contracts, arguing that the firm’s failure to pay its utility bills constituted a material breach of contract. On January 3, Celsius agreed to allow Core Scientific to shut down more than 37,000 Bitcoin mining rigs the miner hosted for the crypto lender.
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