Hut 8 agrees to develop mine site to build equity with Celsius Lenders

Canadian Bitcoin (BTC) mining company Hut8 has signed a tentative agreement to start a new mining site in Cedarvale, Texas, in connection with Celsius Network's bankruptcy proceedings.

Announcing the news on December 18th, Hut 8 said that the mining site will house about 66,000 miners and provide more than 215 megawatts of power.

Hut 8 President Asher Gennot said the deal has a “dual” goal, building equity with Celsius' lenders and increasing the strength of its managed services business. “When the site is operational, we expect to have more than 895 MW of infrastructure under our umbrella,” the executive said.

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

Celsius It was one of several crypto lenders to fail in 2022 and declared bankruptcy in July. Former CEO Alex Mashinsky was jailed in July 2023 on charges of securities fraud, commodities fraud and wire fraud.

Related: What happened in crypto this weekend?

Hut 8's deal with Celsius' creditors comes shortly after Celsius was granted bankruptcy court approval as part of a broader proposal to pay off customers and turn into a creditor-owned bitcoin mining company. In the bankruptcy proposal, Celsius' post-bankruptcy mining business is reportedly set to be run by US Bitcoin Corp (USBTC), which has completed its November 2023 merger with Hat8.

Previously, USBTC had an agreement with Celsius to host 8,500 miners at the Alpha site by August 2023.

Magazine: Legislators' fear and skepticism fuel proposed crypto regulations in the US.