USBTC aims to become Bitcoin (BTC) mining giant after deal to buy Celsius assets

US Bitcoin Corp. (USBTC) aims to become one of the largest miners in the US by increasing its computing power by 12.2 exahash/second (EH/s), following a deal to buy mining assets from bankrupt lender Celsius, according to a press release.

The miner is part of a consortium called Fahrenheit that won a bankruptcy auction for Celsius’ assets, which include a loan portfolio, crypto assets and 121,800 mining machines. Once it brings all mining rigs online, the fleet will total at least 270,000 mining rigs, the miner told CoinDesk. This will bring its computing power to the ranks of mining giants such as Riot Platforms (RIOT), Core Scientific (CORZ), and Marathon Digital Holdings (MARA).

Under the Celsius deal, USBTC will enter into one or more operational and service agreements to become the “exclusive operator” of the Celsius mining fleet, the miner said. In addition, USBTC will receive a $15 million annual management fee for the mining assets, net of operating expenses, for the five years it will manage the platforms, the company added. That’s $75 million in addition to costs, provided USBTC meets certain operational requirements.

Another $20 million in management fees will go to the Fahrenheit Consortium, court documents show. The consortium will also receive equity incentives in the new company that will house Celsius’ assets. USBTC also needs to build 100 megawatts (MW) of infrastructure to house the Celsius facilities, and prepare a plan to build out an additional 240 MW of capacity at a site behind the meter.

The Miami-based company has managed to massively increase its operational capabilities in recent months, capitalizing on opportunities that emerged from bankruptcies. It started out from a single location in Niagara Falls, New York, but has now taken control of three locations formerly operated by Compute North, which filed for Chapter 11 in September 2022. Two are owned by energy investment company Generate Capital, while the third is a joint venture between USBTC and energy company NextEra Energy.

USBTC has managed to close hosting deals for 150,000 machines in its facilities. It is also undergoing a merger with Canada’s Hut 8 Mining (HUT).

Other consortium members who will manage Celsius’ assets include Proof Group Capital Management, Steven Kokinos and Ravi Kaza.

UPDATE (May 25, 1:30 UTC): Changes subheading to reflect total potential management costs specifies that USBTC will have at least 270,000 mining rigs after the deal.

Leave a comment