Bankrupt Bitcoin (BTC) mining firm, Core Scientific, filed an emergency motion on Jan. 25, seeking to sell Bitmain coupons worth $6.6 million, according to court records. 

As per the filing, some conditions applied to the coupons make them useless for Core Scientific’s business. Specifically, 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.”

The coupons are limited to S19 models, which provide a lower hash rate output than Bitmain’s recent models. “The Debtors do not believe that utilizing their liquidity to purchase new S19 Miners, even with the availability of the Bitmain Coupons, is the best use of the Debtors’ cash,” claimed the company.

Moreover, 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. Core Scientific also noted that it would not acquire additional S19 miners under Chapter 11 or afterward.

Along with the motion, the company has been discussing with Bitmain and two potential third parties interested in buying the coupons at a significant discount. In particular, 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 to Core Scientific’s balance sheets. The company also noted:

“While the aggregate purchase price of approximately $1.0 million would represent a significant discount to the approximately $6.7 million face value of the Bitmain Coupons, it would also represent significant value above what these Bitmain Coupons are worth to the Debtors and their estates: zero.”

According to the filing, the crypto winter resulted in a flood of S19 Miners being offered for sale on the secondary market, driving prices down. “As such, recent transactions for S19 Miner coupons on the coupon exchange have occurred at values of between 15% and 25% of the coupon’s face value.”

Among the largest cryptocurrency mining companies in the United States, Core Scientific filed for Chapter 11 bankruptcy on Dec. 21, 2022, due to rising energy costs, declining revenues and a slump in Bitcoin prices. The company recently obtained court approval to access a $37.5 million loan from existing creditors amid liquidity issues.