Marble – BlackRock Inc. is among a group of creditors that lent $75 million to Core Scientific Inc. so it can continue to operate while it’s in bankruptcy, according to multiple published reports.
BlackRock has committed $17 million to Core for its part of the loan. The company is Core Scientific’s largest shareholder.
Texas-based Core, one of the biggest publicly traded cryptocurrency mining companies in the United States, filed for Chapter 11 bankruptcy protection on Dec. 21.
“Core filed for Chapter 11 bankruptcy like Hertz, Chrysler and Delta Airlines (have in the past),” Director of Construction Jack Lewis said. “The filing will be focused on restructuring the company’s balance sheet.”
Core attributed its bankruptcy to declining bitcoin prices, rising energy costs for bitcoin mining and a $7 million unpaid debt from crypto lender Celsius Network, one of its largest customers.
Core’s bankruptcy is the latest in a series of failures across the industry. More than $1 trillion in value has been erased from the crypto sector this year.
Core is also facing a class-action lawsuit filed following the company’s late October warnings that it was heading toward bankruptcy if it could not improve its financial condition. That admission dropped its shares 98.67 percent to 18 U.S. cents. Those shares had fallen below 8 cents as of Monday.
Lewis said Core’s financial turmoil has yet to have an impact on the company’s flagship plant in Cherokee County, the former site of Coats American.
“Core’s business model, the day-to-day operations of its sites, client’s resources, and the corporate structure, are robust and functioning normally,” Lewis said. “The Marble operations or employees should not be adversely impacted by this procedure.”
Core’s local plant has about 50 employees, and Lewis estimates that the company pumps roughly $20 million into the economy of Cherokee and surrounding counties each year.
Core purchased the plant in Marble in 2017, and first production began in 2018. The company has since expanded to include facilities in Georgia, Kentucky, Texas and North Dakota.
Core’s financial issues stem from a variety of circumstances, including the low price of bitcoin, but they are closely linked to the company’s legal dispute with crypto lending firm Celsius. Core argued in an Oct. 19 filing that Celsius owed the company more than $2.1 million. Celsius countered that Core delayed the deployment of its mining rigs and supplied less power than required under an existing contract.
Crypto mining has been a hot-button issue within the county for more than a year, largely due to the unenclosed crypto operation on Harshaw Road outside of Murphy. Nearby residents have complained about ongoing noise pollution from the Harshaw Road site, run by Exponential Digital/Ankr, which also operates a site in Ranger.