Canadian Bitcoin mining firm Hut 8 has entered into a preliminary agreement to establish a new mining facility in Cedarvale, Texas, coinciding with the ongoing bankruptcy proceedings of Celsius Network.
On December 18, Hut 8 revealed its plans to construct a mining site in Cedarvale that will accommodate approximately 66,000 miners and produce over 215 megawatts (MW) of power.
Asher Genoot, the president of Hut 8, emphasized that the agreement serves a dual purpose: to foster goodwill with Celsius' creditors and bolster the custody services business. Genoot expressed the company's anticipation of operating more than 895 megawatts of infrastructure upon the successful establishment of the new site.
As part of an interim agreement with Celsius, Hut 8 will oversee end-to-end development services for the Cedarvale location. The construction is slated to commence in the upcoming weeks. Hut 8 will provide a suite of services encompassing design, engineering, financial modeling, budgeting, accounting, construction management, procurement, logistics, and coordination of RFP (Request for Proposal) processes.
Celsius Network was among several crypto lending platforms that faced insolvency in 2022, eventually declaring bankruptcy in July of that year. Following the company's collapse, its former CEO Alex Mashinsky faced legal troubles, being arrested in July 2023 on charges of securities fraud, commodities fraud, and wire fraud.
Hut 8's transition into a Bitcoin mining company owned by creditors was approved by the bankruptcy court. This transformation aligned with an arrangement struck with Celsius debtors as part of a broader strategy aimed at repaying customers affected by the collapse. In line with the bankruptcy proposal, the mining operations of Celsius post-bankruptcy will be managed by the United States Bitcoin Corporation (USBTC). Hut 8 merged with USBTC in November 2023, solidifying this shift.
Additionally, USBTC had previously engaged in an agreement with Celsius to accommodate 8,500 miners at its Alpha site in August 2023.
