Bitcoin Miner Hut 8 Agrees to Build New Site for Celsius Creditors

Bitcoin (BTC) mining company Hut 8 has entered into an interim agreement with the bankrupt crypto lender Celsius Network to construct and deploy new mining operations in Cedarvale, Texas.

This collaboration is a key component of Celsius’s ongoing bankruptcy proceedings, designed to foster positive relations with its creditors potentially through financial agreements or equity arrangements.

Hut 8 to Build New Crypto Mining Facility

According to an official press release on Monday, Hut 8 has been selected to build the new facility for Celsius creditors. The company’s president, Asher Genoot, said that the company was chosen for the task due to its track record of successful operations.

“We believe that the strength of Hut 8’s managed services business with 680 MW currently under management, coupled with our track record of swiftly standing up mining infrastructure and efficiently running and optimizing operations, were key factors in being chosen as the partners for this project,” he said.

Work on construction is expected to commence in the coming weeks. Once completed, the new facility will accommodate approximately 66,000 miners. The site will also be powered by a robust energy supply exceeding 215 megawatts (MW) at full operational capacity.

Twofold Goals

Under the terms of the interim agreement, Hut 8, headquartered in Canada, will take on a comprehensive role, providing end-to-end development services for the Cedarvale site. The company will also be responsible for site design, engineering, financial modeling, budgeting, accounting, construction management, procurement, logistics, and RFP coordination.

President Genoot said the interim agreement with Celsius aims to achieve a dual objective: building equity with Celsius creditors and elevating the capabilities of the managed services business.

“Our goal is twofold: to build equity with creditors of Celsius while also growing the strength and vitality of our managed services business, which we anticipate will have more than 895 MW of infrastructure under our umbrella once the site is up and running,” said Genoot.

Celsius to Transition into a Crypto Mining Firm

The deal with Hut 8 comes after Celsius recently obtained approval from the bankruptcy court to transition into a Bitcoin mining entity that creditors will solely operate.

The move is part of a comprehensive plan to settle customer debts. According to the bankruptcy proposal, the management of Celsius’s post-bankruptcy mining operations was expected to be overseen by US Bitcoin Corp (USBTC).

Last month, USBTC merged with Hut 8 to become a United States-domiciled company. Before the merger, the company had finalized an arrangement with Celsius to host 8,500 miners at its Alpha Site earlier in August.

Recall that Celsius was among the crypto firms that suffered a liquidity crisis last year during the 2022 crypto winter, which wiped billions of dollars from the industry.

The crypto lender officially sought bankruptcy protection in July 2022. Its former CEO, Alex Mashinsky, was arrested later this year on July 2023 on charges of securities fraud, commodities fraud, and wire fraud.