Riot Blockchain Moves Part of Bitcoin Mining Operation to Upstate New York

Riot Blockchain, one of the few publicly traded bitcoin mining companies in the U.S., has executed a co-location mining services contract with a crypto data center Coinmint. 

Announced Tuesday, the Colorado-based firm will send a portion of its S17 bitcoin mining machines from its facilities in Oklahoma City to Coinmint’s power plant in upstate New York.

The move came two months after Riot purchased 1,060 Bitmain S17 Pro Antminers for that facility. The addition is part of Riot’s recent expansion in bitcoin mining. 

The firm bought 4,000 miners from Bitmain with $6.35 million in December and installed 3,000 miners in the following month. The firm expects to boost its computing capacity by 240 percent with the latest addition. 

“Riot believes the hosting arrangement can positively impact its power costs, the Oklahoma City facility's heat and environmental operating issues, and provide a path to diversify its mining operations,” Riot said in a statement.  

According to the contract, Coinmint's Massena, N.Y., facility will be responsible for initial operational, security and reporting controls testing and verification. As one of the largest crypto data centers in the U.S., Coinmint claims to have 435 megawatts of transformer capacity. It was converted to a data center from an aluminum smelter in 2016. 

The plant can generate excess power in part due to the abundant hydroelectric and wind generation in the area. Its management experiences in wholesale electricity markets is another economic advantage for Coinmint to operate mining machines, according to Riot. 

Riot has also assessed how COVID-19’s impact on its relocation plan and concluded that the novel coronavirus’ risks are reasonably mitigated due to the "plug and play '' infrastructure of Coinmint's facilities. “To date, the impact has remained minimal,” Riot said. 

Riot’s rearrangement with its mining facilities could also be part of its shift from crypto trading to bitcoin mining businesses. The firm has been on the lookout for potential buyers for its crypto trading platform RiotX since February. 

Chicago-based financial services firm XMS Capital Partners, which advises on potential strategic deals for Riot, identified this opportunity as part of its engagement with the firm.