Core Scientific Seeks to Sell $6.6M in Bitmain Coupons at Discount

• Core Scientific filed an emergency motion on Jan. 25, seeking to sell Bitmain coupons worth $6.6 million.
• Some conditions make the coupons useless for Core Scientific’s business, including the inability to exchange them for cash or use them to purchase recent models of S19 miners.
• The company is discussing with Bitmain and two potential third parties interested in buying the coupons at a significant discount.

Core Scientific, a Bitcoin (BTC) mining firm, recently filed an emergency motion on Jan 25, seeking to sell Bitmain coupons worth $6.6 million. The firm, which is currently undergoing Chapter 11 bankruptcy reorganization, noted that the coupons have some conditions that make them useless for its business.

Specifically, the coupons can only be used to pay 30% of any new order of S19 Miners from Bitmain, and cannot be exchanged with Bitmain for cash. Furthermore, the Bitmain coupons are due to expire between March and April of 2023, when the company anticipates having emerged from its bankruptcy reorganization. The firm also noted that it would not acquire additional S19 miners under Chapter 11 or afterward.

In order to ensure that the coupons are monetized, Core Scientific is currently discussing with Bitmain and two other potential third parties interested in buying the coupons at a significant discount. In particular, the sale of $1.9 million of Bitmain coupons for $285,000 and the sale of $4.8 million in coupons for approximately $713,000 represent 15% of the coupons’ face value.

Core Scientific’s motion filing highlights the financial struggles that Bitcoin miners have experienced in recent times due to the low price of BTC. In order to survive, miners have had to resort to cost-cutting measures, such as selling coupons and other assets, in order to stay afloat. While the sale of the Bitmain coupons is still pending court approval, it is likely that Core Scientific will be able to monetize the coupons and use the proceeds to continue its operations.