Expanding Mining Facilities
Cryptocurrency mining hardware maker Bitmain has entered into an agreement with bankrupt mining firm Core Scientific to expand their mining facilities. The deal involves a combination of equity and cash.
$23 Million in Cash and $53.9 Million in Stock
Under the agreement, Bitmain will provide 27,000 Bitcoin (BTC) mining rigs to Core Scientific in exchange for $23 million in cash. Additionally, Core Scientific will receive $53.9 million worth of common stock from the bankrupt firm.
New Hosting Arrangement for Bitmain
In addition to the hardware purchase, Bitmain and Core Scientific have agreed on a new hosting arrangement to support Bitmain's mining operations.
Restructuring Plan
The deal was finalized in August as part of Core Scientific's restructuring plan. Other companies involved in the plan include Anchorage, BlockFi, and Mass Mutual Asset Finance. Anchorage opted for cash, while the other three firms chose a combination of cash and equity.
Expansion By 2023
If approved by a judge, Bitmain's investment and expansion plan will be implemented in the fourth quarter of 2023. This will potentially increase Core Scientific's hash rate by 4.1 exahashes.
Collaboration for Increased Productivity
Bitmain and Core Scientific have also agreed to work together to upgrade Bitmain's last-generation miners hosted at Core Scientific's data centers, aiming to further enhance the firm's productivity.
Bankruptcy and Market Turmoil
Core Scientific filed for Chapter 11 bankruptcy in December 2022, citing the financial crisis and the declining price of Bitcoin as primary factors. The firm experienced difficulties leading up to its collapse due to the market turmoil.
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