Hut 8 agrees to develop mining site to build equity with Celsius creditors

The Canadian Bitcoin (BTC) mining firm Hut 8 has signed an interim agreement to launch a new mining site in Cedarvale, Texas, in connection with the Celsius Network bankruptcy proceedings.

Announcing the news on Dec. 18, Hut 8 said that the mining site will house almost 66,000 miners and be powered by more than 215 megawatts (MW) of energy.

Hut 8 president Asher Genoot said that the agreement targets a “twofold” goal, which is to build equity with creditors of Celsius while also growing the strength of the managed services business. “We anticipate having more than 895 MW of infrastructure under our umbrella once the site is up and running,” the executive noted.

Under the interim agreement with Celsius, Hut 8 will provide end-to-end development services for the Cedarvale site. Construction is expected to begin in the coming weeks, with Hut 8 expected to provide services like design, engineering, financial modeling, budgeting, accounting, construction management, procurement, logistics and request for proposal coordination.

Celsius was one of several crypto lenders that collapsed in 2022, declaring bankruptcy in July. Its former CEO, Alex Mashinsky, was arrested in July 2023 on charges of securities fraud, commodities fraud and wire fraud.

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Hut 8’s agreement with Celsius debtors comes shortly after Celsius won bankruptcy court approval for its plan to transform into a creditor-owned Bitcoin mining firm as part of a broader proposal to repay customers. Under the bankruptcy proposal, Celsius’s post-bankruptcy mining business was reportedly set to be managed by US Bitcoin Corp (USBTC), which completed a merger with Hut 8 in November 2023.

Previously, USBTC also secured a deal with Celsius to host 8,500 miners at its Alpha Site in August 2023.

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