Controversial Bitcoin Miner Greenidge Generation Looks to Raise $22.8 Million

Controversial crypto miner Greenidge Generation is looking to raise up to $22.8 million as part of a Class A common stock offer.

The proposed raise comes amid intense pressure from both environmental activists and regulators.

As per the company’s SEC filing, the new capital will be used for “paying or refinancing all or a portion of our indebtedness at the time, and funding 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 the sale 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 book looks a little less secure than last year.

Greenidge hit by Bitcoin’s slide

Greenidge reported net losses of $107.9 million in its second quarter and also scaled back plans to expand into Texas in August 2022, instead choosing to focus on its established sites in South Carolina and New York.

In addition, the crypto miner has also come under intense criticism regarding its environmental practices from both activists and legislators.

The New York Department of Environmental Conservation (DEC) denied Greenidge’s air permit renewal in June 2022, with issues such as its failure to prove “adequate GreenHouse Gas (GHG) mitigation measures” being cited.

The environmental issues surrounding energy-intensive proof-of-work (PoW) mining have 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 pronounced drop in Bitcoin’s valuation from its peak, it’s not lost all interest from institutional investors. B. Riley Securities, the firm assisting with Greenidge’s new raise, has also been pumping money into other mining firms.

In late September, the bank purchased $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 crypto winter making bitcoin mining less profitable for many, the U.S. is rising in terms of its global importance within the mining industry.

The U.S. overtook China as the largest bitcoin miner in October 2021, according to University of Cambridge data. It has held that position since then, despite rising competition from nations with low energy costs, such as Kazakhstan.