Kentucky Sen. Brandon Smith (R-Hazard) is going through two separate authorized circumstances associated to a Bitcoin mining restore enterprise he based in Letcher County, Kentucky.
Smith is the CEO and co-founder of Mohawk Power, which in 2022 pivoted from coal cleanup operations to ASIC restore and different Bitcoin mining companies.
Native outlet, Lexington Herald Chief, stories that Ricky Dale Cole sued Smith in Letcher Circuit Courtroom in January, accusing the lawmaker of misrepresenting the worth of Mohawk Power.
Cole claims that he bought 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 swimsuit 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 swimsuit 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 Power in June 2022.
In keeping with HBT’s allegations, Smith had made a deal to work with HBTPower workers to coach his personal staff and purchase the in-house skill to restore Bitcoin mining machines.
Nonetheless, Smith and different Mohawk representatives ultimately requested HBTPower personnel to go away 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 in regards to the trade’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.
Talking to Decrypt in his capability as Mohawk Power CEO, Smith stated 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 12 months contract and refused to begin working on the Mohawk plant, that doesn’t influence Mohawk’s long run plans to carry extra jobs and expertise coaching to the area,” he stated. “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 growth, with Bitcoin mining websites within the U.S. growing in quantity by 23% between 2022 and 2024, to 48.
In keeping with Shanon Squires, the Chief Mining Officer at Compass Mining, such progress has continued this 12 months, as evidenced by Bitcoin’s hashrate reaching new all-time highs lately.
“Within the U.S., that momentum is particularly seen in states like Texas and Wyoming,” she advised Decrypt. “The growth appears to be largely coming from present corporations, somewhat than from new gamers getting into the market.”
Whereas affirming that the American cryptomining trade has turn out to be more and more professionalized lately, there may be nonetheless a point 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, corporations nonetheless must do their homework and work with established companions which have confirmed themselves by means of a number of cycles.”
