Hut 8 receives greenlight from Canadian Supreme Court for USBTC merger

September 18, 2023 Coin Telegraph

Bitcoin

The Supreme Court of British Columbia has given Hut 8 final clearance to complete proposed merger with USBTC.

Canadian Bitcoin mining firm Hut 8 is set to wrap up its planned merger with US Bitcoin (USBTC) following final approval from the Supreme Court of British Columbia.

Hut8 and USBTC had announced the move in February 2023 which was subject to shareholder and regulatory approval. The merger will see Hut 8 and USBTC form Hut 8 Corporation, or “New Hut”, which will become a publicly traded United States-based business.

An initial announcement from Hut 8 highlighted that the merger would open up 825 megawatts of capacity across six different Bitcoin mining and data center facilities.

While the Supreme Court of British Columbia has issued a final order approving the merger, the closing of the deal is subject to a handful of outstanding requirements, including the approval of USBTC shareholders.

Hut 8 anticipates that the final transaction confirming the merger and creation of New Hut is expected to take place before the end of 2023.

New Hut also plans to list its shares on both the Nasdaq and Toronot stock exchanges, trading under the ticker $HUT. Shareholders will also need to complete and submit transmittal letters in order to receive shares of New Hut common stock once the merger is complete.

Hut 8 recently moved some 6,400 ASIC mining rigs from its inactive North Bay facility in Ontario to the U.S state of Texas as it looks to serve increased demand for artificial intelligence (AI) and high-performance computing.

The redeployment of hardware from the site was largely necessitated by an ongoing legal dispute between Hut 8 and third-party energy supplier Validus Power over alleged failure to meet contractual obligations. Operations at the mining facility have been suspended since November 2022.

Digital Currency Group’s institutional mining and staking subsidiary Foundry Digital also announced a formal partnership with Hut 8 in August 2023. The deal will see Hut 8 support a number of business offerings for Foundry using its Ontario-based data centre. Foundry has been using Hut 8 infrastructure to support its cryptocurrency mining pool since 2020.

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Hut 8 CEO weighs in on the bull and bear markets from a mining perspective

February 21, 2023 Coin Telegraph

Bitcoin mining

Jaime Leverton has led digital asset mining player Hut 8 over the past two years, wading through the waters of the bull market of 2021 and the bear market of 2022.

In January 2023, during the World Economic Forum’s (WEF) annual conference in Davos, Switzerland, Jaime Leverton, CEO of Hut 8, a crypto mining entity that trades as a public company, sat down with me for a fireside chat at the Crypto Summit on the Promenade. Leverton outlined some of her views on the recent shakeout in the cryptocurrency market and reflected on how Bitcoin (BTC) mining fares during the current turbulent period for the industry.

Throughout 2021 and 2022, the crypto industry experienced significant growth, followed by bear market struggles, bankruptcies and job cuts. Leverton took on the position of leading Hut 8 Mining as CEO a little over two years ago and experienced those ups and downs from the front line.

*Jaime Leverton CEO of Hut 8 (left) and Kristina Lucrezia Cornèr (right) during Crypto Summit 2023 in Davos*

“Obviously, all of us in crypto have experienced the volatility,” Leverton said when asked about her thoughts on the last couple of years while leading Hut 8 through the crypto industry’s ups and downs. “I think the mining industry, in particular, has gone through some pretty big swings in the last two years,” she added, noting that “2022 was really the perfect storm from a Bitcoin mining industry perspective.” She continued:

“We had record-high hash rate, languishing Bitcoin price and energy crisis, which came quickly on the back of one of the biggest bull markets we’ve seen for the crypto mining industry in particular. We saw more than 20 new mining companies go public. At the peak, we had close to 40 publicly-traded Bitcoin mining companies in North America alone.”

A pioneer in the Bitcoin mining sector as far as public entities go, Hut 8 hit the Canadian market in 2018 and subsequently the Nasdaq in 2022, Leverton noted. The 2021 crypto bull run attracted sizable capital inflows to digital asset mining, which increased leverage, according to the Hut 8 CEO.

“Then you couple that with the perfect storm that I referenced happened in 2022 — the industry has really been shaken up, and people that took on a lot of leverage we’ve seen struggle, and so we’re now in a period of starting to see some consolidation in the space, we’re starting to see more companies just start to diversify their portfolios, something that we at Hut did — we started to do in the bull market as well.”

Leverton made it onto Cointelegraph’s annual Top 100 list of the crypto industry’s most impactful players. She ranks 73rd in the 2023 edition.

Later in the interview, Leverton discussed what Bitcoin mining aims to deliver. “I think the most fascinating conversation that we need to be having around Bitcoin mining is actually the promise of it,” adding:

“The beautiful thing about Bitcoin mining — I was a founding member of the Bitcoin Mining Council, and we actually released our latest report earlier this week, which shows the energy use by the Bitcoin industry by the blockchain is 58.9% renewably sourced now and that continues to improve quarter over quarter.”

The 58.9% figure comes from a report detailing 2022 Q4 survey results from the Bitcoin Mining Council, released in January 2023. Energy usage has been a debated topic in the crypto space, with Tesla CEO Elon Musk expressing interest in the subject. One argument from cybersecurity engineer Michel Khazzaka is that the mainstream banking world dwarfs Bitcoin in terms of energy usage, as per a different Cointelegraph interview.

“Where the excitement comes for me and for our space is how Bitcoin mining can really push the envelope around innovation and investment in renewables in a truly significant way,” Leverton said, adding:

“We saw just an explosion of Bitcoin miners starting to use waste methane, flare gas, landfills to generate energy and to keep that carbon from being released into the atmosphere.”

According to Leverton: “The beauty of a Bitcoin mine is it doesn’t need to be connected to transmission lines, so you can actually mine Bitcoin directly where waste energy is being created.” She noted that miners are starting to develop in rural communities in Africa and added that they resolved to self-funding, which is “the most exciting thing that’s happening in the mining space in 2023 and 2024.”

Hut 8 merger would’ve happened even without FTX or crypto turmoil, says CEO

February 9, 2023 Coin Telegraph

BTC Mining

Falling crypto prices have forced many crypto miners to cut costs or consolidate in order to survive the crypto winter.

Crypto exchange FTX’s collapse and overall crypto market turmoil were not key factors in the decision to merge crypto mining firm Hut 8 with US Bitcoin Corp., according to Hut 8 CEO Jamie Leverton.

On Feb. 8, Leverton said that the merger was mainly about providing diversified revenue and helping scale the combined businesses, stating:

“I think this deal would have happened regardless. The ability for us to bring these businesses together we think is so incredibly complementary.”

The all-stock merger was announced on Feb. 7 with the combined company, now called Hut 8 Corp or “New Hut,” to be based primarily in the United States rather than Canada.

Regarding the FTX collapse in November, Leverton said that fears were “starting to subside a little bit,” and interest was returning to the crypto industry.

She added, “I think we're seeing a lot of interest come back into this space, we've seen significant appreciation across the space so far in 2023.”

Merging the two mining firms is “going to provide an incredible amount of scale,” she continued, adding that there will be “diversified revenue programs,” which is a good strategy for both companies independently.

New Hut will reportedly have access to around 825 megawatts across six facilities in New York, Texas, and Alberta province in Canada. Its total combined mining capacity will be 5.6 exahashes per second (EH/s).

Commenting on the choice of location, Leverton said that it was in the best interest of the business to have “diversified geographies,” adding:

“One of the advantages here is [that the merger is] giving us that geographic diversification. There's uncertainty in regulatory environments on both sides of the border,”

Hut 8 has a mining facility in North Bay, Ontario, however, operations have been suspended due to an ongoing court battle with its energy supplier.

US Bitcoin’s Niagara facility has issues of its own with an ongoing dispute with the City of Niagara Falls over complaints by residents regarding noise levels.

The firm provided more details on the merger in a presentation on Feb. 8. The transaction is expected to close in Q2, 2023, and is subject to shareholder, regulatory, and stock exchange approvals.

For more information on our proposed strategic merger with USBTC, please see our presentation, here: https://t.co/Wg1shII9ei pic.twitter.com/1TjHAYTTiw
— Hut 8 (@Hut8Mining) February 8, 2023

Earlier this week, Leverton said that during the interim period, the firm plans to cover its operating costs through a combination of selling the Bitcoin it mines, and exploring various debt options.

Hut 8 stock slumped 8% on the day the merger was announced. Furthermore, according to MarketWatch, Hut shares had fallen 1.2% on the day to $2.12 in after-hours trading. The stock is currently trading 86% down from its November 2021 all-time high of $15.28.

Crypto mining firms Hut 8 and US Bitcoin plan merger

February 7, 2023 Coin Telegraph

Bitcoin mining

The merger, which will create the company 'New Hut', is still subject to court and regulatory approval by U.S. and Canadian authorities.

Canada-based cryptocurrency mining company Hut 8 Mining has announced plans to merge with U.S. Bitcoin to form Hut 8 Corp, or "New Hut".

In a Feb. 7 announcement, Hut 8 said the boards of directors of the two firms had unanimously approved a definitive business combination agreement aimed at combining the mining firms in what will become a United States-based business. Once the deal is finalized, Hut 8 Mining and U.S. Bitcoin, or USBTC, will become subsidiaries of New Hut, with shareholders collectively owning 50% of the new merged firm.

"Bringing together Hut 8's operational track record and diversified revenue streams with US Bitcoin's scalable mining sites, sizeable hosting business, and industry-leading managed infrastructure operations not only accelerates our diversified strategy and positions us for near-term growth, but also establishes us as a strong, U.S.-based player that is ready and able to seize additional opportunities as they arise,” said Hut 8 CEO Jaime Leverton.

News: Hut 8 and US Bitcoin Corp have announced a merger of equals, expecting to establish a new Hut 8 as a large-scale publicly traded North American Bitcoin miner with diversified fiat revenue streams. Read more: https://t.co/TL0ZHpkKqu
— Hut 8 (@Hut8Mining) February 7, 2023

Following the merger, the New Hut company will reportedly have access to roughly 825 megawatts across six facilities for crypto mining and other operations. This will include five sites in New York, Texas, and Canada’s Alberta province, with a self-mining capacity of 5.6 exahashes per second (EH/s).

Leverton added:

"This Transaction has given us the opportunity to leverage the significant, unencumbered Bitcoin stack we have HODLed to date [...] During the interim period, we plan to cover our operating costs through a combination of selling the Bitcoin we mine, selling from our stack and/or exploring various debt options.”

The merger is still subject to court and regulatory approval by U.S. and Canadian authorities. Hut 8 added that USBTC faced “a legal dispute” with the City of Niagara Falls in New York — many residents have reportedly criticized the mining operations for noise pollution.

WonderFi, another Canada-based crypto firm backed by Shark Tank star Kevin O’Leary, announced in January it was considering a merger with Coinsquare, reportedly aiming to “create a Canadian crypto giant”. In the United States, blockchain firm GammaRey also signed a merger agreement with analytics company GoLogiq, targeting wealth management for younger generations.

Bitcoin miner Hut 8 takes stoush with Ontario power supplier to court

January 27, 2023 Coin Telegraph

Bitcoin

The lawsuit escalates a months-long dispute between the crypto miner and one of its energy suppliers in Canada.

Canada-based Bitcoin (BTC) miner Hut 8 Mining Corporation has ramped up its ongoing fight with its power supplier for one of its mining sites, filing a lawsuit in a Canadian court.

Hut 8 said on Jan. 26 it filed a Statement of Claim in the Superior Court of Justice of Ontario against Validus Power, an energy supplier for a Hut 8 mining facility in North Bay, Ontario.

The firms have been in an ongoing dispute since early November 2022 due to what Hut 8 alleges is a failure by Validus to “meet its contractual obligations” for the power purchase agreement (PPA).

In its new lawsuit, Hut 8 is seeking “monetary damages incurred as a result of the dispute” and enforcement of certain provisions as per the agreement signed by the two companies.

Hut 8 and Validus started working together in late 2021 with Validus initially providing 35 megawatts (MW) of power to North Bay, but was slated to provide around 100 MW by the end of 2021.

*A June 2022 photo from the North Bay facility showing multiple ASIC crypto miners. Source:* *Hut 8*

On Nov. 9, 2022, Hut 8 issued a notice of default to Validus alleging it failed to achieve milestones by the dates outlined in the PPA and claimed the firm demanded Hut 8 pay for energy that was at a higher price than that under the terms of the agreement.

An update from Hut 8 later that month revealed Validus suspended the delivery of energy to its North Bay site. Validus fired back with its own default notice alleging Hut 8 failed to pay for its power charges — a claim Hut 8 denies.

We’re in North Bay today touring ⁦@Hut8Mining⁩’s 3rd mining site, with ⁦@PowerValidus⁩ #btc #canada pic.twitter.com/3BWNQm0Sft
— Hut 8 (@Hut8Mining) October 25, 2021

To this date, operations at the site remain suspended. Hut 8 said it’s exploring alternatives to mitigate the impact of the dispute including through “organic and inorganic growth opportunities.”

Before it was taken offline, the North Bay site had 8,800 crypto mining rigs and a hash rate capacity of 0.84 exahashes per second (EH/s), accounting for over one-fourth of its total production capacity, according to a December 2022 investor deck.

Cointelegraph contacted Validus and Hut 8 for comment but did not receive an immediate response from either firm.

Hut 8 surpasses 8,000 BTC mark as it continues to HODL

September 6, 2022 Coin Telegraph

Bitcoin

The Canadian mining operator has managed to HODL through tough market conditions while other miners have sold holdings to manage operational costs.

Canadian mining firm Hut 8 saw its Bitcoin holdings surpass the 8,000 Bitcoin (BTC) mark as it continues to accumulate self-mined holdings through depressed cryptocurrency market conditions.

Hut 8 released its latest mining report for August 2022, increasing its Bitcoin holdings by 375 BTC for the month to take its total reserves to 8,111 BTC. Hut 8 reported that it had mined 12.1 BTC per day at a rate of 125.8 BTC per exahash for the month.

While other mining operators have been forced to sell portions of their BTC holdings amid the ongoing cryptocurrency bear market, Hut 8 has managed to continue its self-described “long-standing HODL strategy” and still holds all of its mined BTC.

Hut 8 also announced that it had installed 180 Nvidia GPUs at its main data center in Kelowna, Canada. The center currently mines Ether (ETH) but with the Merge set to take place in September 2022, its GPU mining equipment will be used to provide artificial intelligence, machine learning or VFX rendering services.

Hut 8 has also continued increasing its mining capacity with the acquisition of Chinese ASIC MicroBT miners. The firm paid $58.7 million for 12,000 new MicroBT M30S, M30S+ and M30S++ miners in October 2021 and has received orders of 1000 machines monthly through 2022.

Industry experts have warned of the potential implications of Ethereum’s Merge on other cryptocurrencies that run on Proof-of-Work (PoW) consensus algorithms. Once Ethereum transitions to the proof-of-stake operated Beacon Chain, many miners that have secured the Ethereum blockchain will be looking to other PoW chains to continue mining.

Ethereum Classic (ETC) saw its token value increase by more than 10% in early September as blockchain explorer and mining pool operator BTC.com launched an ETC pool featuring zero-fee mining over a three-month period.

Research Shows 19% of Bitcoin’s Hashrate Is Managed by Publicly Listed Companies

April 6, 2022 Bitcoin.com

Crypto miner Hut 8 surpassed 5K Bitcoin held in reserves

November 11, 2021 Coin Telegraph

Bitcoin

According to the firm, it mines close to 20 BTC per day.

In its third-quarter earnings release, Canadian cryptocurrency miner Hut8 announced that it surpassed the goal set earlier this year of holding 5,000 Bitcoins (BTC) in reserves through mining. Its Bitcoin balance now amounts to 5,053, for a total market value of $430 million.

During the quarter, Hut 8 generated 50.34 million (CA$) (worth around $40 million) in revenue and CA$23.37 million (about $18.57 million) in net income, up from CA$5.75 million in revenue (about $4.57 million) and a loss of CA$0.90 million (or $750,000) in the prior year's quarter. The company hosts a sizable fleet of Application-Specific Integrated Circuit, or ASIC, machines used for Bitcoin mining. In addition, it deploys NVIDIA GPUs to mine Ethereum (ETH).

The company's total hash rate (Bitcoin and Ethereum mining combined), or the number of guesses per second needed to obtain a mathematical solution to mine a new block on a proof-of-work blockchain, amounts to 1.7 exahashes per second (1.7*10^18 hashes/s, EH/s). In context, the total hash rate of the entire Bitcoin network is 162 EH/s, according to data provided by Blockchain.com. As for Ethereum, that number stands at 817.06 terahashes per second (817.06*10^12 hashes/s, TH/s), according to data provided by 2Miners.com. The firm's contracted mining capacity for Ethereum stands at 1.6 TH/s.

Hut 8 adopts a hold-on-for-dear-life, or HODL, strategy when it comes to mining Bitcoin; that is, it does not seek to sell them under most circumstances. The firm also lends out its BTC to farm yields, and claims to mine close to 20 BTC per day.

Location of Hut 8's crypto mining operations. | Source: Hut 8 Q3 2021 Earnings Call Presentation

The company operates in the Canadian province of Alberta with plans to expand to Ontario. It uses a mixture of natural gas, wind and green energy for its mining operations.