Hut 8 signs four-year deal to manage Celsius Bitcoin mining operations Ionic Digital Hut 8 signs four-year deal to manage Celsius Bitcoin mining operations Ionic Digital
Bitcoin miner Hut8 said it could earn more than $100M for managing defunct Celsius mining assets.
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Updated: Feb. 1, 2024 at 3:31 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Hut 8 has formalized a comprehensive four-year partnership with Ionic Digital Inc., encompassing end-to-end managed services across all of Ionic’s Bitcoin mining operations.
This move was announced on Feb. 1, marking a significant development for Ionic, a mining-focused entity that recently emerged from Celsius’s Chapter 11 bankruptcy. Ionic would be led by the former Chief Commercial Officer of Hut 8, Matt Prusak.
Per the statement, Hut 8 will assume responsibility for maintaining and expanding Ionic’s four existing sites in Midland, Texas, and will also be saddled with the development and operation of Ionic’s Cedarvale site. Additionally, Hut 8 will host 8,500 Ionic miners at its Niagara Falls, New York facility.
Hut 8 CEO Jaime Leverton revealed that Hut 8 has been designing and constructing the Cedarvale site since December. He added:
“Our managed services offering is distinct within the industry and ultimately differentiated Hut 8 as the best partner to manage Celsius’ mining operations through Ionic Digital,” Leverton said.
When the Cedarvale site is completed, Hut 8 will oversee an impressive 127,000 miners, boasting a nameplate hashrate of 12 EH/s and supported by a robust 300 MW energy infrastructure in the first year of the managed services agreement.
Hut 8 anticipates a positive substantial financial impact for its management services. The firm revealed that the deal will generate a projected total cash revenue of $81.5 million during the four years. Its potential earnings could surpass $100 million contingent on meeting key milestones, potentially leading to an extension of the agreement to a five-year term.
Additionally, it stated that it would receive equity compensation from Ionic during the period.
Hut 8 further disclosed that it had acquired a stake in Ionic. The BTC miner acquired 374,261 shares valued at $6.4 million in cash, and another acquisition is slated before May 31. This investment will allow it to secure two board seats at Ionic Digital, with one director being Asher Genoot, the president of Hut 8.
Celsius emerges from bankruptcy.
Defunct crypto lender Celsius emerged from its bankruptcy on Jan. 31, revealing plans to distribute more than $3 billion to its creditors.
The firm said it would utilize payment company PayPal and cryptocurrency exchange Coinbase to distribute the cryptocurrencies to its creditors. It added that it will shutter its mobile and web applications by Feb. 28.
“Please note that because of the volume of distributions and security measures, it will take up to 2 weeks for the Debtors to send all instructions. We know you have all waited a long time, but please be patient,” Celsius said.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Celsius Network
Celsius Network is a bankrupt cryptocurrency lending company that was founded in 2017 and headquartered in Hoboken, New Jersey.
Hut 8
Hut 8 is a digital asset miner with two digital asset mining sites located in Southern Alberta and a third site in North Bay, Ontario, Canada.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
PayPal
PayPal is an American multinational financial technology firm that operates an online payment system in most countries that permits online money transfers and serves as an electronic replacement for conventional paper methods like checks and money orders.