• Core Scientific filed an emergency motion on Jan. 25, seeking to sell Bitmain coupons worth $6.6 million.
• The coupons are limited to S19 models, which provide a lower hash rate output than Bitmain’s recent models.
• The company has been discussing with Bitmain and two potential third parties interested in buying the coupons at a significant discount.

Core Scientific, a Bitcoin mining firm, recently filed an emergency motion on Jan. 25, 2021 in a court of law, seeking to sell Bitmain coupons worth $6.6 million. The motion was filed due to the fact that some conditions applied to the coupons make them useless for Core Scientific’s business. 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.”

Because the coupons are limited to S19 models, which provide a lower hash rate output than Bitmain’s recent models, Core Scientific believes that using its liquidity to purchase new S19 miners with the coupons is not the best use of their cash. Compounding this issue is that the Bitmain coupons are due to expire between March and April of 2023 when the company anticipates having emerged from its Chapter 11 bankruptcy reorganization. This has led Core Scientific to seek a third-party buyer for the coupons at a significant discount, as they would not acquire additional S19 miners under Chapter 11 or afterward.

It is reported that Core Scientific is currently in discussions with Bitmain and two potential third parties interested in buying the coupons at a discount. Specifically, 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. The sale would result in an aggregate of nearly $1.0 million in proceeds for Core Scientific, which is a substantial amount when compared to the current value of the coupons.

The future of the Bitmain coupons is currently uncertain as the court filing is still being processed. However, if the sale is approved, Core Scientific could benefit greatly from the proceeds of the sale, allowing them to focus on their business objectives without the burden of unusable coupons.