- Bondholders of the problematic Bitcoin miner Core Scientific are allegedly collaborating with attorneys.
- Several use cases have put pressure on Core Scientific.
- As of October 26, the company had 24 Bitcoins and over $26.6 million in cash.
According to WU Blockchain, Core Scientific Inc. convertible bondholders are collaborating with restructuring attorneys at Paul Hastings as the business considers filing for bankruptcy.
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Investors were alarmed after Core Scientific issued a warning last week. This warning stated that it would run out of funds by the end of the year and might turn to bankruptcy for help. Following the revelation, the company’s shares dropped to a low of about 20 cents. Core scientific is one of the biggest Bitcoin miners in the world.
The sustained decline in the price of Bitcoin, rising power prices, greater competition, and legal disputes with the insolvent cryptocurrency lender Celsius Networks LLC have all put pressure on Core Scientific.
Notably, this year has already witnessed a number of bankruptcy cases in the digital asset sector. This includes cryptocurrency broker Voyager Digital Ltd. and the company providing mining services Compute North Holdings.
Due to its financial difficulties, Core Scientific announced that the company would be unable to make several debt-related payments. It specifies payments that were due in late October and early November.
The company’s obligations under a pair of convertible notes due in 2025 might be in default if those creditors decide to accelerate payments. Additionally, this might include those who plan to file a lawsuit against the business for non-payment or take other steps.
The business has 24 Bitcoins and almost $26.6 million in cash as of October 26. At the end of June, it owed more than $850 million in debt according to a Bloomberg report.
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