Bitmain and Core Scientific Forge Multi-Million Dollar Deal
Bitmain, a prominent cryptocurrency mining hardware manufacturer, and the now-bankrupt crypto mining entity, Core Scientific, have reached a significant agreement that involves a combination of equity and cash to advance their mining facility expansion plans.
Under this agreement, Bitmain will provide Core Scientific with 27,000 Bitcoin mining rigs in exchange for $23 million in cash and $53.9 million worth of common stock from the distressed mining company.
Beyond the hardware procurement, the two companies have also inked a fresh hosting arrangement aimed at supporting Bitmain’s mining endeavors.
The deal’s finalization occurred in August, marked by a court filing that spotlighted Bitmain’s intention to trade mining hardware for cash and equity within the context of Core Scientific’s restructuring blueprint.
This restructuring plan encompassed other entities like Anchorage, BlockFi, and Mass Mutual Asset Finance.
Notably, aside from Anchorage, all three firms opted for a combination of cash and equity as a means to settle their claims.
Bitmain’s ambitious expansion and investment strategy are poised to come to fruition by the fourth quarter of 2023, contingent upon approval from a judge.
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Once greenlit, this hardware infusion could potentially bolster Core Scientific’s hash rate by an impressive 4.1 exahashes.
Additionally, the two crypto mining collaborators have committed to collaborating on the enhancement of Bitmain’s legacy miners situated within Core Scientific’s data centers, with the ultimate goal of optimizing the firm’s operational efficiency.
Core Scientific’s financial woes led to their Chapter 11 bankruptcy filing in December 2022, with the primary drivers being the financial crisis and the declining value of Bitcoin.
The company faced mounting challenges in the lead-up to its eventual collapse, primarily due to the turbulent conditions prevailing in the cryptocurrency market during that period.
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