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, reviews that Ricky Dale Cole sued Smith in Letcher Circuit Court docket in January, accusing the lawmaker of misrepresenting the worth of Mohawk Vitality.
Cole claims that he bought a warehouse to Mohawk, agreeing with Smith to promote the premises under market worth 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.
In line with HBT’s allegations, Smith had made a deal to work with HBTPower workers to coach his personal employees and purchase the in-house potential to restore Bitcoin mining machines.
Nevertheless, Smith and different Mohawk representatives ultimately 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 towards him, and has filed counterclaims towards each plaintiffs.
Regardless of the authorized difficulties surrounding Mohawk’s pivot to crypto, Smith stays optimistic concerning 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.
Chatting with Decrypt in his capability as Mohawk Vitality 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 start out working on the Mohawk plant, that doesn’t affect 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 troublesome pivot got here throughout a interval when the U.S. cryptocurrency mining sector witnessed fast growth, with Bitcoin mining websites within the U.S. growing in quantity by 23% between 2022 and 2024, to 48.
In line with Shanon Squires, the Chief Mining Officer at Compass Mining, such development has continued this 12 months, as evidenced by Bitcoin’s hashrate reaching new all-time highs lately.
“Within the U.S., that momentum is very seen in states like Texas and Wyoming,” she instructed Decrypt. “The growth appears to be largely coming from present firms, quite than from new gamers coming into the market.”
Whereas affirming that the American cryptomining trade has grow to be more and more professionalized in recent times, there’s 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, firms nonetheless must do their homework and work with established companions which have confirmed themselves by a number of cycles.”
