HIVE Blockchain and Genesis Mining Announce Settlement, Reboot Mining Operations in Sweden
ZUG, SWITZERLAND and VANCOUVER, CA — HIVE Blockchain Technologies Ltd. and Genesis Mining have reached a settlement agreement which positively resolves prior misunderstandings and disagreements. The agreement was reached with a focus on initiatives which improve communication, transparency and mutually beneficial cooperation between Genesis and HIVE. Operationally, HIVE and Genesis will reboot HIVE’s 20.4 megawatt facility in Sweden with 14,000 GPUs mining Ethereum. HIVE will continue to receive 300 Petahash of cloud-based ASIC Bitcoin mining capacity from Genesis.
Timing of the settlement agreement coincides with improved economic conditions in the cryptocurrency ecosystem amid a substantial decline in energy prices in Sweden and the significant appreciation of digital assets including Ethereum and Bitcoin. Since HIVE’s April 22, 2019 announcement that its equipment and operations in Sweden had become dormant, Ethereum prices have nearly doubled, Bitcoin has more than doubled and electricity prices in Sweden are approximately half of the cost experienced in April. These conditions are expected to have a very positive impact on HIVE’s gross mining margin.
“I am pleased that we have been able to reach a settlement agreement that focuses on peace and prosperity for both companies and enables management to return to creating value for HIVE shareholders,” said Frank Holmes, Interim Executive Chairman and Interim CEO of HIVE. “HIVE has a tremendous portfolio of infrastructure assets and we are benefitting from the dramatic resurgence of cryptocurrencies seen in 2019. We look forward to transitioning our GPU mining assets in Sweden and Iceland to our direct management or to a new service provider and to our continued partnership with Genesis for the delivery of our cloud-based ASIC mining capacity as Bitcoin and Ethereum continue to increase in value in what has been a volatile asset class. The blockchain ecosystem continues to evolve and it is our belief that HIVE is well positioned to play a significant role in this ever-changing technology. Further, this agreement better positions HIVE for its next phase as HIVE 2.0 with improved visibility and control over our global mining operations.”
“As a significant shareholder in HIVE, Genesis is pleased to have reached a resolution to this issue,” said Marco Streng, CEO of Genesis. “We share HIVE’s vision of accelerating the development of the blockchain sector and look forward to working collaboratively with HIVE to enhance value for all shareholders.”
The agreement settles outstanding issues associated with the Sweden Data Center and both parties agreed to mutually release each other from all claims arising from the master service and related agreements, and discontinue any legal proceedings and withdraw any demands made. Furthermore, HIVE will assume responsibility for the operation of the Sweden and Iceland data centers from Genesis to itself or a third party, and Genesis will provide transitional services to HIVE to ensure an orderly transition. Additionally, the board of directors will undergo a restructuring which will see Marco Streng and Björn Arzt resign as directors of HIVE and its subsidiaries. As part of the agreement, for a period of three years, Genesis will be entitled to nominate one director to the HIVE board of directors provided it continues to hold no less than 10% of the Company’s shares.
Since inception, HIVE has pursued and innovated as a public company in regulatory compliance and innovation. The transition to HIVE 2.0 sees HIVE pursuing a strategic agreement with Argo Mining on virgin coin off-take and its Mining-as-a-Service platform geared towards institutions, which sees continued demand as a result of new FAFT regulation passed this week. HIVE has also partnered with Amber AI, a crypto trader providing state-of-the-art machine learning to optimize mining margins for HIVE’s operations.
About HIVE Blockchain Technologies: HIVE Blockchain Technologies Ltd. is a growth oriented, TSX.V-listed company building a bridge from the blockchain sector to traditional capital markets. HIVE is strategically partnered with Genesis Mining Ltd. to build the next generation of blockchain infrastructure. HIVE owns state-of-the-art GPU-based digital currency mining resources in Iceland and Sweden, which produce newly minted digital currencies like Ethereum continuously as well as cloud-based ASIC-based capacity which produces newly minted digital currencies like Bitcoin. Its deployments provide shareholders with exposure to the operating margins of digital currency mining as well as a growing portfolio of crypto-coins.
About Genesis Mining: Genesis Mining is an industry leader of cryptocurrency mining hosting services and mining related solutions. With over 2 million users Genesis Mining is the world’s leading multi-algorithm cloud mining service. Genesis Mining operates various large scale, high efficiency data centers, and offers more than 15 minable cryptocurrencies through 6 major mining algorithms.