DURHAM — MGT Capital Investments Inc. announced a deal to move its bitcoin mining facility to Colorado Springs, Colorado, from Sweden, according to a filing with the Securities and Exchange Commission Monday.
The purpose of the deal is to facilitate MGT’s growth plans for 2019.
MGT is one of the largest U.S. based bitcoin miners. Its expansion model focuses on securing low cost power and growing its crypto assets materially. Its headquarters are located in Durham.
“MGT is committed to the present and future of the Bitcoin eco-structure, and we have the capabilities to be opportunistic during this period of market stability,” said chief operating officer Steven Schaeffer in a statement. “I believe that sometimes we must run into the burning building to find the greatest opportunities. Further, we plan to reassert our stature as one of the leaders in U.S. Bitcoin mining through an enhanced outreach program with the financial and business communities.”
According to the release, the company has minimized traditional risks as the new facility is ready to operate. The Colorado Springs facility has dedicated a standalone building for MGT use.
The building has an electrical capacity of 10 megawatts, with the infrastructure for another 30 megawatts.
The company hopes to complete the move and begin mining at full capacity by the end of December.
On Dec. 7, 2017, and Jan. 9, 2019, the company entered into agreements with Florida-based Beacon Leasing LLC, in which Beacon agreed to lease its facility in Sweden to the MGT for its mining operations.
Durham-based MGT learned on May 16, 2018, that Beacon was in breach of the hosting agreement, including failure to pay certain service providers to the facility including the electric utility. As a result of these defaults, MGT shut its operations in Sweden, prompting the company to seek a new location to deploy its bitcoin mining machines.
The company previously disclosed that it was analyzing various options to relocate approximately 6,300 of its bitcoin miners.
On Sept. 10, 2018, the company announced that CEO Robert Ladd would be taking a leave of absence
The SEC filed a complaint against Ladd on Sept. 7. He has been charged with participation in long-running fraudulent schemes that generated over $27 million from unlawful stock sales and caused significant harm to retail investors who were left holding virtually worthless stock.
Robert Holmes, independent director and chairman of the board of directors, has assumed his duties.
Although MGT was not named a defendant, the News and Observer reported that the company appears to be the firm whose stock price Ladd allegedly helped pump.
MGT stock stock closed 0.088 cents on Monday, down 12 percent from the previous day’s close.
This story is from the North Carolina Business News Wire, a service of the UNC-Chapel Hill School of Media and Journalism