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Mining firm Core Scientific has opposed paying a $4.7 million administrative claim filed by crypto lender Celsius Network, leading to a battle between the companies over contractual obligations.

According to the objection filed in Texas bankruptcy court on May 5, Core Scientific requested that Celsius Network’s $4.7 million administrative claims be dismissed, as the company cannot demonstrate that it is entitled to one.

“Celsius’s allocation request and immediate payment of Celsius’s alleged administrative claim ignores that Core has material claims against Celsius, which Core believes exceed Celsius’s alleged administrative claim,” the objection wrote.

For context, Core first signed a contract with Celsius in 2020 to host its cryptocurrency holdings in Core’s data centers. However, due to an increase in the price of energy, Core passed these additional costs on to Celsius, an allocation that was supposedly stipulated in the original contract.

Core Scientific 2020 contract with Celsius Network. Source: court file
Despite Celsius initially paying these costs, the crypto lender ceased payments after filing for bankruptcy, Core Scientific claimed in the objection.

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“If anyone has been unfairly enriched here, it is Celsius,” Core Scientific wrote in the objection. According to the now-defunct Bitcoin miner, Celsius has been “counting on nearly $8 million of money it owes Core” due to a “gross post-petition violation” of the agreed-upon dispute resolution mechanism.

Related: Bittrex Files for Chapter 11 Bankruptcy Just Weeks After SEC Charges

Celsius now owes Core Scientific a total of about $11 million, a sum that racks up an additional $28,000 in fees and interest with each passing day, lawyers for the Bitcoin mining firm argued.

The conflict between the two firms has raged since October 19, when Core Scientific first accused Celsius of not paying its energy bills, citing nonpayment as a major factor in the liquidity problems that led to the embattled Bitcoin miner to file for Chapter 11 bankruptcy on December 21.

“The millions of dollars Celsius defrauded Core after Celsius’ bankruptcy filing plus the millions of dollars in litigation… contributed significantly to Core’s liquidity drain and eventual Chapter 11 filing.”
On December 28, Core Scientific filed a motion seeking approval to reject the Celsius contracts, alleging that the company’s failure to pay energy bills constituted a material breach of contract. On Jan. 3, Celsius agreed to allow Core Scientific to shut down more than 37,000 Bitcoin mining rigs that the miner hosted for the cryptocurrency lender.

Source: CoinTelegraph