Controversial Bitcoin Miner Greenidge Generation Looks To Raise $22.8 Million
by James · October 6, 2022
Controversial crypto miner Greenidge Generation is looking to raise up to $22.8 million as part of a Class A share offering.
The proposed increase comes under intense pressure from both environmental activists and regulators.
According to the company’s SEC filing, the new capital will be used to “pay or refinance all or part of our debt at that time, and fund acquisitions, capital expenditures and working capital.”
The New York-based miner has entered into a sales agreement with crypto-focused investment bank B. Riley Securities, which will see it take 5% of sales as commission.
The call for investment also coincides with an upheaval in the economics of Bitcoin mining, which has changed dramatically since the asset’s peak in value.
These days, Greenidge’s balance sheet looks a little less secure than it did last year.
Greenidge hit by Bitcoin’s slide
Greenidge reported a net loss of $107.9 million in the second quarter and also scaled back plans to expand into Texas in August 2022, choosing instead to focus on its established locations in South Carolina and New York.
Additionally, the crypto miner has also come under intense criticism regarding its environmental practices from activists and lawmakers alike.
The New York Department of Environmental Conservation (DEC) denied Greenidge’s air permit renewal in June 2022, with issues such as its failure to demonstrate “adequate greenhouse gas (GHG) reduction measures” being cited.
The environmental issues surrounding energy-intensive proof of work (PoW) mining has been an issue for regulators in the New York area for quite some time.
The goals set out in New York State’s Climate Act aim to reduce greenhouse gas emissions from 1990 levels by 40% by 2030 and by no less than 85% by 2050.
Despite the marked fall in Bitcoin’s valuation from its peak, it has not lost all interest from institutional investors. B. Riley Securities, the firm assisting with Greenidge’s recent raise, has also pumped money into other mining companies.
In late September, the bank bought $100 million in equity over a two-year period in bitcoin miner Iris Energy, following a similar $100 million investment in Core Scientific in July 2022.
Despite the crypto winter making bitcoin mining less profitable for many, the United States is increasing its global importance in the mining industry.
The United States overtook China as the largest bitcoin miner in October 2021, according to data from the University of Cambridge. It has held that position ever since, despite increasing competition from nations with low energy costs, such as Kazakhstan.
