Bitcoin miners who set up their own power plants face crippling $5.6M fine
Vancouver-based Bitcoin miner Link Global faces a CAD$7.1 million ($5.6 million) fine — and potential financial ruin — after it failed to notify the local regulators when it opened two power plants last year.
Alberta Utilities Commission (AUC) investigators discovered Link Global’s Sturgeon County and Kirkwall power plants had mined Bitcoin for 364 and 426 days respectively, reported CBC.
Link’s Sturgeon County mine allegedly broke AUC guidelines when its plants had adverse effects on the surrounding environment.
Neighbors reportedly didn’t take kindly to the noise created by the plant’s four 1.25 MW generators. The plant drew power from a natural gas well owned by Calgary-based MAGA (Make Alberta Great Again) Energy.
AUC forced to estimate Bitcoin miners’ profits
AUC agents stipulated Link Global must shell out some CAD$2 million ($1.6 million) to counterbalance the financial gains from electricity the company generated.
The watchdog also wants over CAD$5 million ($4 million) to repay the Bitcoin Link Global mined. It has proposed another two fines totaling over CAD$81,000 ($64,400).
But Link Global didn’t disclose how much Bitcoin was mined. AUC made estimates based on press releases. The calculations take into account the plants’ operating hours and Bitcoin’s price.
In its submission filed late last month, the AUC’s enforcement team said (our emphasis):
“Link Global received a significant economic benefit by immediately commencing operations at both power plants without taking any of the measures required to receive approval from the Commission or to qualify for an exemption.
“Link Global’s wilful disregard for the existence of regulatory requirements prior to commencing operations and its persistent operation in contravention … heightens the seriousness of the contraventions.”
Read more: [Chinese BTC miners sent 200K rigs to Canada but can’t find enough power]
In addition, the AUC alleges the company submitted inaccurate financial statements when it claimed it generated zero revenue from crypto mining during a six-month period ending May 31.
This is despite the company adding a number of new Bitcoin mining rigs.
Link Global’s legal team has called this a “very serious allegation.” It also says the penalty proposed by the commission would “constitute a fatal blow” to the firm.
Company chief exec Stephen Jenkins issued a prepared statement on the matter Thursday:
We have acknowledged we made some mistakes and have worked hard to rectify those; however, we have followed the orders of AUC since being notified of issues in early 2021. Our business works to respect the laws, the people and the environment, and we believe that our submission to the AUC will make this apparent.
According to CBC, Link Global is planning to move its Sturgeon plant north and has requested permission to continue operations near Kirkwall.
For the record, the company also operates a plant in Westlock which did comply with AUC rules.
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