Core Scientific (1), a US-based blockchain hosting provider, has successfully pushed back against a $4.7 million claim by Celsius Network (2), a crypto lending and borrowing platform. The dispute centered around a number of ASIC miners that Celsius claimed Core Scientific was unjustly enriching itself with.
Celsius had claimed that the machines in question were supposed to be operated on behalf of Celsius, but that Core Scientific had been running them for its own benefit, accumulating both Bitcoin (BTC) and Bitcoin Cash (BCH) in the process.
According to Celsius, the equipment was leased from Core Scientific between September and November 2020 for use in mining Bitcoin and Bitcoin Cash. Celsius alleged that despite having control of the mining pool, the funds were never paid out to Celsius.
Core Scientific countered by stating that the terms of the lease agreement were breached by Celsius, and that it was therefore entitled to sell the Bitcoin and Bitcoin Cash it had mined.
Celsius disputed the claim, arguing that it had no knowledge of the Bitcoin and Bitcoin Cash being mined, and that the funds should be returned. The case was brought before the New York Southern District Court (3) in March of this year.
On May 5, the court ruled in favor of Core Scientific, dismissing Celsius' claim on the grounds that the lease agreement allowed Core Scientific to sell the BTC and BCH it mined as long as Celsius breached the agreement.
Core Scientific was also granted a counterclaim for $125,000 in unpaid mining fees, which Celsius was ordered to pay.
The ruling is likely to have broader implications for the cryptocurrency mining industry. In a statement, Core Scientific CEO Kevin Turner said that the case has "affirmed that a mining company cannot have its equipment utilized by someone who is not fulfilling the terms of their lease agreement."
This case highlights the potential risks associated with leasing mining equipment, as well as the importance of ensuring that lease agreements are carefully negotiated and clearly defined.
Meta Description: Core Scientific, a blockchain hosting provider, has successfully pushed back against a $4.7 million claim by Celsius Network, a crypto lending and borrowing platform over a dispute on ASIC miners. The court ruled in favor of Core Scientific, dismissing Celsius' claim and granting a counterclaim for $125,000 in unpaid mining fees, which Celsius was ordered to pay.