Bitcoin-based Core Scientific unlikely to continue operations due to financial instability | The Financial Express

Bitcoin-based Core Scientific unlikely to continue operations due to financial instability

According to Cointelegraph, it was found that the firm had accrued a net loss worth $434.8 million in Q3, 2022

Bitcoin-based Core Scientific unlikely to continue operations due to financial instability
Reportedly, the company has also taken the decision to discontinue payments to certain firms from which it borrowed

Bitcoin miner Core Scientific has given warnings of “substantial doubt” on account of being able to continue with their operations over the next one year due to financial uncertainty, as reported by Cointelegraph.

According to Cointelegraph, through a quarterly report filed with the United States Securities and Exchange Commission (SEC) on November 12, 2022, it was found that the firm had accrued a net loss worth $434.8 million in Q3, 2022. It is believed that post suffering net losses of $862 million in Q2, 2022, the firm’s total net losses for 2022 is at $1.71 billion. 

“Given the uncertainty regarding the Company’s financial condition, substantial doubt exists about the Company’s ability to continue as a going concern through November, 2023,” Core Scientific stated.

On the basis of information by Cointelegraph, the platform mentioned doubts around its capability to raise funds through financing or capital market due to “uncertanities and current market conditions,” which have caused the reduction in the availability of those liquidity sources. Reportedly, rising energy costs, Bitcoin’s falling price, increased hash rate, among others, were highlighted as reasons behind the liquidity squeeze. Further, the platform mentioned about “substantial doubt exists” around its capability to continue operating as its “very difficult to predict when or if Bitcoin prices will recover or energy costs will abate.” 

Moreover, Cointelegraph noted that Core Scientific is aiming to implement measures to lighten its financial stress, including decreasing operating costs, reducing or delaying capital expenditures, and increasing hosting revenues. Reportedly, the company has also taken the decision to discontinue payments to certain firms from which it borrowed, and has been warned that it may be sued for nonpayment and can face increased interest rates as a repercussion. 

(With insights from Cointelegraph)

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First published on: 23-11-2022 at 11:50 IST