Core

Bitcoin

Sphere

<a href="https://ultramining.com/news/en/bitcoin-mining-giant-core-scientific-prepares-for-post-bankruptcy-comeback/">Core Scientific</a>, a key player in the Bitcoin mining industry, is reportedly approaching the final stages of exiting bankruptcy and has recently agreed to a settlement with Sphere 3D and Gryphon Digital Mining. This settlement concerns a $34 million unsecured claim related to an order of 70,000 <a href="https://ultramining.com/news/en/russias-bitcoin-gold-rush-mining-machine-influx-outpaces-rest-of-the-world/">Bitcoin miners</a> that were never actually delivered, according to <a href="https://theminermag.com/news/2024-01-04/core-scientific-sphere-gryphon-settlement-miner-weekly/">TheMinerMag</a>. 
The settlement, which awaits bankruptcy court approval, proposes that Sphere 3D and Gryphon Digital Mining will have a total unsecured claim allowance of $10 million. This resolution provides some closure to a dispute that highlights the volatility and risk in the Bitcoin mining industry, especially as it underwent severe stress during the crypto winter of 2022. 
The backstory involves Sphere 3D and Gryphon Digital Mining's ambitions to merge and go public in the U.S. during the height of market enthusiasm in 2021. Following the merger announcement, Gryphon reportedly signed a hosting contract with Core Scientific to colocate 70,000 units of <a href="https://ultramining.com/en/manufacturers/bitmain/">Bitmain</a>’s S19 miners, which was expected to yield a substantial proprietary hashrate for Gryphon and steady revenue for Core from hosting fees. 
However, the contract faced issues as Gryphon allegedly failed to provide the miners due to <a href="https://ultramining.com/news/en/liquidstack-secures-funding-to-boost-eco-friendly-bitcoin-mining-in-the-u-s/">funding</a> problems. Gryphon then turned to a manufacturer named NuMiner, which had made bold claims about powerful mining equipment and took a significant preorder from Sphere for $1.7 billion. NuMiner, however, failed to deliver, citing supply chain issues, and Sphere requested a return of its $10 million deposit. 
The failure to deliver the miners led to the dissolution of the merger between Sphere and Gryphon and subsequent legal disputes. Core Scientific, after filing for Chapter 11 bankruptcy in December 2022, found itself entangled in these disputes as Sphere sought a refund of prepayments when Core claimed these were non-refundable. 
Core Scientific's adversary complaint in November alleged that Gryphon's breach of contract led to over $100 million in expenses and lost profits for Core. With this new settlement, Core Scientific seems to be making headway in resolving its bankruptcy proceedings and financial disputes with Sphere and Gryphon. 
This case exemplifies the complexities and the high-stakes nature of contractual agreements in the rapidly evolving Bitcoin mining sector. It also serves as a cautionary tale about the risks associated with ambitious expansion plans that rely heavily on the procurement of mining hardware during volatile market conditions.

Core Scientific Settles Claims Over Non-Delivered Bitcoin Miners with Sphere 3D and Gryphon

Ultramining_Eng

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