The miner has the potential to receive up to $75 million in management fees for the Celsius mining rigs over a period of five years.
U.S. Bitcoin Corp. (USBTC) aims to become one of the leading mining companies in the United States by expanding its computing power by 12.2 exahash/second (EH/s). This growth follows a recent agreement to acquire mining assets from Celsius, a bankrupt lender. The information comes from a press release.
The miner, as a member of the consortium called Fahrenheit, successfully secured the Celsius assets through a bankruptcy auction. These assets consist of a lending portfolio, cryptocurrency assets, and a substantial number of mining machines totaling 121,800. Once all the mining rigs are operational, the miner’s fleet will encompass a minimum of 270,000 rigs, placing it in the league of prominent mining giants like Riot Platforms (RIOT), Core Scientific (CORZ), and Marathon Digital Holdings (MARA). The miner shared this information with CryptosHeadlines.
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As part of the Celsius deal, USBTC has announced that it will enter into one or more operating and services agreements, granting them the status of the “exclusive operator” of the Celsius mining fleet. In addition, USBTC will receive an annual management fee of $15 million for the mining assets, after deducting operating expenses, throughout the five-year period of managing the rigs. The firm has specified that this amounts to a potential total of $75 million, contingent upon USBTC meeting specific operational criteria.
According to court documents, an additional $20 million in management fees will be allocated to the Fahrenheit consortium. Furthermore, the consortium will receive stock incentives in the newly established company that will oversee the Celsius assets. USBTC is also responsible for constructing infrastructure capable of accommodating the Celsius rigs, amounting to 100 megawatts (MW) of capacity. Additionally, USBTC must outline a plan for expanding an additional 240 MW of capacity at a behind-the-meter location.
Over the past few months, the Miami-based company has significantly expanded its operational capacity by capitalizing on opportunities arising from bankruptcies. Initially operating from a single site in Niagara Falls, New York, it has now gained control of three additional sites previously managed by Compute North, which filed for Chapter 11 bankruptcy in September 2022. Among these sites, two are owned by Generate Capital, an energy investment firm, while the third is a joint venture involving USBTC and energy company NextEra Energy.
USBTC has successfully obtained hosting agreements for accommodating 150,000 machines within its facilities. Additionally, the company is currently in the process of merging with Hut 8 Mining, a mining company based in Canada.
The consortium responsible for overseeing the Celsius assets includes Proof Group Capital Management, Steven Kokinos, and Ravi Kaza as its other members.
UPDATE (May 25, 1:30 UTC): Revised heading to reflect the overall potential management fees and clarified that USBTC will possess a minimum of 270,000 mining rigs following the agreement.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.