Kentucky Sen. Brandon Smith (R-Hazard) is going through two separate authorized instances associated to a Bitcoin mining restore enterprise he based in Letcher County, Kentucky.
Smith is the CEO and co-founder of Mohawk Vitality, which in 2022 pivoted from coal cleanup operations to ASIC restore and different Bitcoin mining companies.
Native outlet, Lexington Herald Chief, experiences that Ricky Dale Cole sued Smith in Letcher Circuit Courtroom in January, accusing the lawmaker of misrepresenting the worth of Mohawk Vitality.
Cole claims that he offered a warehouse to Mohawk, agreeing with Smith to promote the premises beneath market value in return for a 20% stake within the enterprise.
But Cole’s go well with alleges that the corporate has refused to share information about its funds and that he has not profited from the deal. He additionally alleged that Smith made false guarantees and representations.
This go well with comes along with a case filed in November 2023 by Huobi-subsidiary HBTPower, which alleges breach of contract and misrepresentation, following an settlement with Mohawk Vitality in June 2022.
Based on HBT’s allegations, Smith had made a deal to work with HBTPower staff to coach his personal staff and purchase the in-house skill to restore Bitcoin mining machines.
Nevertheless, Smith and different Mohawk representatives finally requested HBTPower personnel to depart Mohawk’s premises, with HBTPower claiming that Smith didn’t personal the warehouse on the time he entered right into a contract with the Chinese language firm.
Smith has denied the allegations in opposition to him, and has filed counterclaims in opposition to each plaintiffs.
Regardless of the authorized difficulties surrounding Mohawk’s pivot to crypto, Smith stays optimistic concerning the business’s future within the US and in Kentucky.
Smith had been instrumental in securing the passage of a number of crypto-related payments in Kentucky, together with a 2021 invoice—which he authored—that gives tax incentives for investments in cryptocurrency mining.
Chatting with Decrypt in his capability as Mohawk Vitality CEO, Smith mentioned that the corporate is “excited” to return to its mission of “job creation and coaching” as soon as the litigation is over.
“Whereas it’s unlucky that Huobi and its shell subsidiary HBTPower breached their eight yr contract and refused to begin working on the Mohawk plant, that doesn’t affect Mohawk’s long run plans to convey extra jobs and expertise coaching to the area,” he mentioned. “Our counter fits to the complaints clarify our place.”
Mohawk’s tough pivot got here throughout a interval when the U.S. cryptocurrency mining sector witnessed speedy enlargement, with Bitcoin mining websites within the U.S. growing in quantity by 23% between 2022 and 2024, to 48.
Based on Shanon Squires, the Chief Mining Officer at Compass Mining, such development has continued this yr, as evidenced by Bitcoin’s hashrate reaching new all-time highs just lately.
“Within the U.S., that momentum is very seen in states like Texas and Wyoming,” she informed Decrypt. “The enlargement appears to be principally coming from current firms, quite than from new gamers coming into the market.”
Whereas affirming that the American cryptomining business has grow to be more and more professionalized in recent times, there may be nonetheless some extent of variability, with some endeavors “popping up and fading” faster than others.
She added, “Whereas Bitcoin mining is not the ‘wild west’ it as soon as was, firms nonetheless must do their homework and work with established companions which have confirmed themselves by way of a number of cycles.”
