Anchorage Digital, a firm specializing in cryptocurrency custody, and Bitmain, a major mining equipment manufacturer, are considering obtaining ownership shares in Core Scientific as part of the company’s efforts to restructure. According to a filing dated August 8th in the United States Bankruptcy Court for the Southern District of Texas, Bitmain’s plan involves selling 27,000 S19j XP Miners to Core Scientific. In return, Core Scientific would provide approximately $23 million in cash and $54 million in equity through newly issued common shares. Anchorage Digital, which had previously provided funds to Core Scientific, also chose to convert its claim into equity.
Other companies such as BlockFi and Mass Mutual Asset Finance have chosen negotiated settlements to address their claims. This proposed restructuring plan is likely to be subject to approval through a creditor vote. The debtors have indicated that by offering equity shares instead of cash and resolving matters with Celsius Network, the plan would reduce the company’s capital requirements by over $30 million.
Core Scientific filed for Chapter 11 bankruptcy in December 2022, citing declining revenue and the decrease in Bitcoin prices, which at that time were at around $29,703. The company had been facing financial challenges leading up to the filing, exacerbated by the collapse of Celsius and the overall crypto market downturn. Despite these challenges, Core Scientific, previously a significant player in mining based on hash rate, has continued its Bitcoin mining operations during the restructuring process.