Iris Energy Bitcoin mining firm close to defaulting on loans of $103 million

Iris Energy, an Australian "sustainable Bitcoin mining company", has announced that they are close to defaulting on loans used to purchase $103 million of Bitcoin mining rigs. These machines depreciate in value quickly, and are currently estimated by the company to be worth $65–$70 million. At the moment, they produce $2 million in gross profit from mining Bitcoin, which is not sufficient for the company to meet the $7 million of loan payments each month.

Core Scientific Bitcoin mining operator warns of missed payments, possible bankruptcy

One of the largest public crypto mining firms in the United States, Core Scientific, filed a notice with the SEC that they would miss upcoming debt payments due in October and November. They also wrote that the company "potentially could seek relief under the applicable bankruptcy or insolvency laws. In the event of a bankruptcy proceeding or insolvency, or restructuring of our capital structure, holders of the Company's common stock could suffer a total loss of their investment."

Core Scientific blamed their precarious financial situation on "the prolonged decrease in the price of bitcoin, the increase in electricity costs, the increase in the global bitcoin network hash rate and the litigation with Celsius Networks LLC and its affiliates". Bankrupt crypto platform Celsius owes Core Scientific around $5.4 million.

Core Scientific's stock plummeted from around $1 a share to around $0.20 on the news, an 80% decrease. The stock started the year at $10.43 a share, and has decreased in value by 98% year-to-date.

Compute North, one of the largest crypto mining datacenters, files for bankruptcy

Aerial photo of dozens of containers housing crypto mining infrastructure on a large plot of landCompute North facility (attribution)
Compute North has filed for Chapter 11 bankruptcy, in what may be a blow to the crypto mining industry. Compute North is a major datacenter provider, and have deals with crypto mining companies including Marathon Digital, Compass Mining, and others. Compute North had just raised $385 million in February through a Series C equity round and debt financing.

Investors face $11 million loss in VBit Technologies/Advanced Mining Group, an alleged crypto Ponzi scheme

The Philadelphia Inquirer published a report on VBit Technologies, later Advanced Mining Group, a company that promised investors to buy and operate Bitcoin miners on their behalf and pay them out the returns. Much of the group's operations relied on a system of "affiliates" bringing in more investors — a sort of suspicious triangular-shaped scheme — and executives and top-performing affiliates enjoyed lavish rewards including expensive wines, six-figure sports cars, and fancy vacations.

However, customers trying to withdraw their "rewards" saw increasing delays in receiving their payouts — days, then weeks, then an indefinite pause. A COO hired by the group left the company only three weeks later. On June 27, the group sent an email to its customers explaining that there was a "potential pending settlement" with the SEC — the first customers heard of the existence of any investigation — and that they would no longer serve customers in the U.S. On July 15, the company promised to refund customers what they paid to sign up with the program, but no refunds or further updates have materialized.

The company has faced lawsuits in Washington state and Delaware, and apparently operated for two years after executives had acknowledged they were violating securities laws. The Delaware lawsuit describes the operation as a Ponzi scheme, and alleges that the company sold packages that would have required far more computing power than the company actually had access to.

Poolin suspends withdrawals from their wallet service

PoolinWallet is a crypto wallet service provided by Poolin, which runs the fourth-largest Bitcoin mining pool and third-largest Ethereum mining pool in the world. In the announcement they wrote that "Poolin Wallet is currently facing some liquidity problems due to recent increasing demands on withdrawals. But please be assured, all user assets are safe and the company's net worth is positive." The firm also urged users to ignore rumors of a rug pull.

Poolin users had been complaining about issues withdrawing from their Poolin wallets since at least August, which had sparked rumors of liquidity problems prior to the announcement. Poolin said in their announcement that they would announce their plans to resume withdrawals within two weeks.

Bitcoin mining operation Riot Blockchain earns more money in July by not mining, effectively mines without paying for power

An aerial photo of large warehouse-style buildings, electricity infrastructure, and shipping containers on a large dirt plotRiot Blockchain's Rockdale, Texas facility (attribution)
The Bitcoin mining firm Riot Blockchain produced 318 BTC in July, valued at around $6.88 million, from its mining operations located in central Texas. The firm also received $9.5 million in power credits for switching off their power-hungry Bitcoin miners during all-time-high energy demands in a month where the state has been experience extreme heat waves.

A press release from Riot proudly announced that "Riot curtailed a total of 11,717 megawatt hours in July, enough to power 13,121 average homes for one month", as though it is acceptable that they are normally using this amount of electricity solely to churn out Bitcoins.

They also wrote that "When applied to anticipated power costs for the month, the power credits and other benefits are expected to effectively eliminate Riot's power costs for July" — meaning that Texas residents are effectively subsidizing the cost of Bitcoin mining whether they like it or not. Meanwhile, the Texas Tribune and The Dallas Morning News report that many Texans are paying 50–70% more for electricity than this time last year.

Researchers identify an attack strategy actively being used by the second-largest Ethereum mining pool to earn outsized mining rewards

Researchers from The Hebrew University have identified an attack on the consensus mechanism used by Ethereum which they describe as risk-free and which can used to "obtain consistently higher mining rewards compared to the honest protocol". They also identified that the attack was being actively used by F2Pool's Ethereum mining pool to attack other mining operations. F2Pool is the second-largest Ethereum mining pool.

By manipulating the timestamps of blocks to be added to the chain, a miner can replace other miners' main-chain blocks with their own blocks, obtaining the fees that would have gone to the other miners. The attack has been called an "Uncle Maker" attack because Ethereum refers to valid but not main-chain blocks as "uncles".

F2Pool co-founder Chun Wang responded on August 8 to the allegations against his mining pool, apparently acknowledging their behavior and suggesting that manipulating a vulnerability in a system is not a "blatant disregard [of] the rules" as the researchers had characterized it. He tweeted: "We respect the *consensus* as is. If you don't like the consensus, convince [Ethereum developer Tim Beiko] to send me another Announcement and change it." Quote-tweeting a tweet by the lead author of the paper who described F2Pool's technique, he wrote, "I can't stop appreciate this elegant implementation of what we've done over the past two years... A robust system must withstand all kind of tests."

New York legislators pass moratorium on permits for fossil fuel powered crypto mining operations

The New York state Senate passed a bill putting a two-year halt on issuing new or renewing existing permits for crypto mining at fossil fuel plants — a practice that has been happening near Seneca Lake and elsewhere in the state. The bill will also begin an environmental impact study on such facilities.

Next, the bill will go to Governor Hochul to sign or veto.

Exxon Mobil reportedly gets in on Bitcoin mining

According to Bloomberg, Exxon Mobil has begun a pilot program to set up Bitcoin miners at an oil well in North Dakota. The project reportedly runs off 18 million ft³ of natural gas that would otherwise be flared. Although early proponents waxed poetic about how anyone could mine Bitcoin, the increasing hardware specialization and massive electricity costs have made it practical at scale only for those with access to the hardware and cheap sources of electricity — including, now, the world's second largest oil company.

Some crypto proponents have spoken positively about using excess gas that would otherwise be flared for Bitcoin mining, though climate experts have spoken out against it being a sufficient or reasonable solution. "It's like if you had a leaky gasoline pipeline and, instead of fixing the problem, you plugged in a Humvee next to the leak and left the engine on in perpetuity with the A/C on full blast," said UC Santa Barbara professor Paasha Mahdavi.

New York power plant starts mining Bitcoin, increases emissions by 6x

An aerial photo of a power plant, with trees and a lake in the backgroundGreenidge Generation, with Seneca Lake in the background (attribution)
A mostly-dormant coal power plant near Seneca Lake in New York was converted to natural gas in 2017 and began devoting much of its power generation to mining Bitcoin in 2019. The plant went from generating a total of 39,406 tons of carbon emissions in 2019 to generating a total of 243,103 tons in 2020, its first full year mining Bitcoin — the equivalent of the emissions that would be produced to provide electricity to around 35,000 households. The plant was operating at only 13% of its capacity in 2020, but has plans to increase its mining operations. Locals who enjoy Seneca Lake for swimming and other leisure activities have said that, due to the plant, Seneca Lake is now "so warm you feel like you're in a hot tub". This is because the plant circulates around 135 million gallons of water a day from the lake to the cool the plant, outputting water directly into the lake at allowed temperatures up to 86–108˚F (though the plant claims its average outflow temperature is 50˚, only 7˚ warmer than the inflow temperature).

Locals of the area have demanded that the Department of Environmental Conservation review the air emissions permit for the plant rather than renew an old one, which the DEC agreed to do, though they have delayed a new decision until March 31. Many pressing for permit review were unhappy with the delay, with the Seneca Lake Guardian reporting, "This delay from the DEC is not benign... Every day that Gov. Hochul and Commissioner Seggos drag their feet on this (permitting) decision is another day for Greenidge to continue expanding operations."

On June 30, regulators denied Greenidge's request to renew their permit.

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