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.

Kazakhstan Cracks Down on Illegal Mining, Busts 13 Crypto Farms

February 23, 2022 Bitcoin.com

Power Deficit Forces Crypto Miners to Leave Kazakhstan

December 29, 2021 Bitcoin.com

‘Mecca of mining’: Brazil considers zero tax on green bitcoin mining

December 10, 2021 Coin Telegraph

Coin Telegraph

Brazil’s congress heard several proposals endorsing a tax exemption on miners and promoting cryptocurrency to the status of a national currency.

A new proposal in the Brazilian Congress calls for a tax exemption on both the importation of crypto mining rigs and on any mining conducted using renewable energy sources.

A Dec. 4 report from Brazilian media outlet Seudinheiro explains that a series of new proposals from Brazilian lawmakers could reduce the criticism crypto gets in South America’s largest country.

Congress also heard a proposal to have cryptocurrency be regarded as a currency as opposed to a commodity. If this proposal passes, crypto exchanges will be able to provide financial services and issue loans to Brazilian residents.

Senator Irajá Silvestre Filho made all three proposals to congress. It is presently unclear how much support the proposals have in the legislature, but there is plenty of support from the Brazilian crypto community.

Ray Nasser, CEO of Arthur Mining, said that if Brazil passes the tax exemption on crypto miners, it could become a global “Mecca of mining”.

Under the condition that cryptocurrency becomes a legal currency, the Central Bank of Brazil would be allowed to issue a digital real central bank digital currency (CBDC). This would put Brazil among nine other countries or jurisdictions that currently issue CBDC to its residents.

Brazil currently produces just under half of its electricity from renewable sources, according to the International Trade Administration. The cost per kilowatt hour is about $0.12, putting it roughly in the middle of the global pack in that regard.

Taynaah Reis, CEO of Moeda, a Brazil-based blockchain finance company, told Cointelegraph:

“Crypto is rising rapidly in Brazil and the regulatory bodies have been very proactive and protective on incentivising mining and drafting policies on best practices as major businesses announced their plans on including crypto.”

Reis also said that miners would have to register their equipment with the Brazilian government as a means of monitoring the ecosystem.

There are existing power supply concerns in Brazil, where power rationing is becoming a reality. Power rationing is where small portions of a country are provided with smaller amounts of power so as to protect the overall power grid.

Rudá Pellini, president of Arthur Mining, said that while Brazil deals with power rationing, he does not see the new addition of Bitcoin miners as a threat to the power supply:

“One of the main problems in the energy issue in Brazil is transmission. We have a large energy generation surplus in the country, and it is possible to promote greater investments in clean energy generation.”

Electricity supply has been an ongoing issue in Kazakhstan, which has become the world’s second-biggest Bitcoin mining nation.

Bitcoin mining power crunch: Kazakhstan looks toward nuclear solution

November 25, 2021 Coin Telegraph

Coin Telegraph

The country saw a great influx of miners this year, but it might have to sacrifice the immense tax revenue from Bitcoin miners if power grid issues are not resolved.

The exodus of Bitcoin miners from China into Kazakhstan has contributed to an energy crunch that the central Asian country’s president has proposed solving with nuclear energy.

Kazakhstan’s Ministry of Energy has attributed the 8% increase in domestic electricity consumption throughout 2021 to Bitcoin miners. The country received at least 87,849 Bitcoin mining machines from Chinese companies so far this year following China’s crackdown on crypto mining, according to data from the Financial Times.

The substantial increase in demand has led to a deficit in the domestic power supply and contributed to unreliable electricity services, according to the Kazakhstan Electricity Grid Operating Company. President Tokayev told bankers at a Nov. 19 meeting that he thinks building a nuclear power plant will help ease the stress on his country’s electrical infrastructure:

“Looking into the future, we will have to make an unpopular decision about the construction of a nuclear power plant.”

While Tokayev did not connect the proposal to Bitcoin mining power use, failing to keep miners in the country could jeopardize the estimated $1.58 billion in tax revenue those miners represent. Power shortages have already forced Bitcoin mining marketplace Xive to leave Kazakhstan. Didar Bekbau, co-founder of Xive, said in a Nov. 25 tweet that he had to shut down his company’s mining farm due to “restricted electricity supply from the grid.”

Little sad to shut down our mining farm in south KZ. Last container is ready to be sent. So much work, people, hopes are ruined. Country risk played out pic.twitter.com/J8ZMg6GeUI
— Didar (@didar_bekbau) November 24, 2021

Kazakhstan is now home to 50 registered crypto mining companies and an unknown number of unregistered ones.

The decision to build new nuclear power plants is a serious one in a country that suffered severe nuclear fallout from weapons testing during Soviet occupation. Kazakhstan’s last nuclear power plant closed in 1999.

About 88% of Kazakhstan’s power currently comes from fossil fuel-burning power plants.