Cryptocurrency miner Core Scientific has announced its intention to accelerate the formulation of a restructuring plan, aiming for a resolution by September 25.
inside Public hearing held On May 23, the judge in the Core Scientific bankruptcy case recommended shortening the recovery schedule by at least a month.
Creditors urged the company to expedite restructuring efforts under Chapter 11, citing concerns about lengthening the procedural period.
Core Scientific legal representatives stressed that additional time is needed to create a robust business plan that can adapt to the dynamic crypto mining landscape. The volatile nature of this industry, characterized by Bitcoin price and hashrate volatility and falling electricity bills, has necessitated meticulous planning to maximize profitability.
Lawyer Ronit Berkovich, representing the debtor, emphasized that the situation has made mining more profitable for Core Scientific. A combination of favorable terms allowed the company to increase revenues and allocate funds to repay $6 million in debt.
Once a major player in the cryptocurrency industry, Core Scientific suffered a sharp downturn when the value of Bitcoin plummeted last November, coinciding with a turbulent period for cryptocurrency exchanges.
This decline was exacerbated by the FTX market crash in mid-November. After achieving a valuation of $4.3 billion when it went public in 2021, its market capitalization had dwindled to $78 million when it filed for bankruptcy in December.
The ongoing bankruptcy proceedings will begin in December 2022 and were originally expected to last six months. However, due to the complexity of the lawsuit, the proceedings are now expected to take more than a year, causing concern for the company’s extensive list of creditors.
With its commitment to move quickly with its turnaround plan, Core Scientific aims to allay creditor concerns while ensuring a comprehensive strategy tailored to the ever-evolving crypto mining sector.