June 3, 2023

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USBTC aims to become a Bitcoin (BTC) mining giant after the deal to buy the percent-grade asset

US Bitcoin Corp (USBTC) is looking to be one of the largest mining companies in the US by increasing its computing power by 12.2 exahachahs/second (EH/s), following a deal to buy mining assets from a bankrupt lender, according to press release.

The miner is part of a consortium, called Fahrenheit, that won a bankruptcy auction for Celsius assets, which include a lending wallet, crypto assets, and 121,800 miners. Once all mining rigs are brought online, the miner told CoinDesk, their fleet will total at least 270,000 miners. This will bring its computing power up the ranks of mining giants like Riot Control (RIOT) PadsAnd Core Scientific (CORZ) And Marathon Digital Holdings (Mara).

Under the Celsius agreement, USBTC will enter into one or more operating and services agreements to be the “exclusive operator” of the Celsius mining fleet, the miner said. Furthermore, USBTC will receive $15 million in annual management fees for mining assets, net of operating expenses, over the five years it will manage the rigs. This is $75 million plus expenses, provided USBTC meets certain operational requirements.

Another $20 million in management fees will go to the Fahrenheit consortium. Court filings appear. The consortium will also receive equity incentives in the new company that will house Celsius’s assets. USBTC is also required to build 100 megawatts (MW) of infrastructure to house centennial rigs, and is offering a plan to build another 240 MW of capacity in behind the counter location.

The Miami-based company has been able to significantly increase its operational capabilities in the past few months, taking advantage of opportunities generated by bankruptcies. It started from one location in Niagara Falls, New York, but now controls three sites previously operated by Compute North, which filed for Chapter 11 in September 2022. Two of them are owned by energy investment firm Generate Capital, while the third is a joint venture between USBTC and Inc. NextEra Energy.

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USBTC has managed to secure hosting deals for 150,000 devices in its facilities. It is also undergoing a merger with Canada’s Hut 8 Mining (HUT).

Other members of the consortium that will manage Celsius’s assets are Proof Group Capital Management, Steven Kokinos, and Ravi Kaza.

Update (May 25, 1:30 UTC): It changes the subtitle to show the total potential management fee, and specifies that USBTC will have at least 270,000 mining rigs after the deal.