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

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

The miner is part of a consortium, called Fahrenheit, that won a bankruptcy auction for the Celsius assets, which include a lending portfolio, crypto assets and 121,800 mining machines. When it brings all the mining rigs online, the fleet will total at least 270,000 mining rigs, the miner told CoinDesk. This will raise the computing power of 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 operations and service agreements to be the “exclusive operator”[ads1]; of the Celsius mining fleet, the miner said. On top of that, USBTC will receive an annual management fee of $15 million for the mining assets, net of operating costs, for the five years it will manage the rigs, the firm added. That’s $75 million on top of the spending, assuming USBTC meets certain operating 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 the Celsius assets. The USBTC must also build a 100 megawatt (MW) infrastructure to house the Celsius rigs, and provide a plan for the development of an additional 240 MW of capacity in an area behind the meter.

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

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

Other members of the consortium that will manage the Celsius assets are Proof Group Capital Management, Steven Kokinos and Ravi Kaza.

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

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