Bitcoin miner Core Scientific (CORZ) will shut down mining rigs tied to Celsius Mining, Core's largest client with over 37,000 machines, after moving to reject its contract in recent days.

Both companies are undergoing Chapter 11 bankruptcies: Celsius Mining filed on July 13, 2022, along with its parent company Celsius Network, while Core filed on December 21. The two companies have been in engaged in ongoing litigation over their contract. Core claims that Celsius is not paying its dues, whereas Celsius argues that Core unilaterally increased its power rate, which isn't stipulated in their services agreement. 

Core's bankruptcy Judge David R. Jones said that the motion to reject doesn't violate the automatic stay on Celsius's property (under U.S. bankruptcy law, once a petition for a Chapter 11 bankruptcy is filed, creditors are no longer able to collect debts from the bankrupt debtor, and Core is likely a Celsius creditor given their dispute over unpaid dues). Jones also called Celsius' objection a "strategic" maneuver in which Celsius is trying to "take advantage" of the judge in its own bankruptcy case, without that judge being able to voice his concerns.

Core Scientific asked for a hearing on Jan. 3, citing the urgency of the matter, which it says is leading it to lose $28,840 per day in power costs.