U.S. Bitcoin Corp. Settles With Niagara Falls City to Resume Bitcoin Mining

The firm is currently trying to complete a merger with Canadian Hut 8 Mining.

AccessTimeIconApr 5, 2023 at 3:16 p.m. UTC
Updated Apr 6, 2023 at 5:27 a.m. UTC

U.S. Bitcoin Corp has settled with the city of Niagara Falls in New York state, in a deal that will allow the mining firm to resume its bitcoin mining operations.

The 50-megawatt (MW) facility has been contentious due to noise complaints from residents. In early March, State Supreme Court judge Edward Pace ordered USBTC to stop operations at the Buffalo Ave. site and pay a $1 million fine.

The deal was passed by a 4-1 vote, according to a U.S. Bitcoin Corp spokesperson.

A company spokesperson confirmed the site, which has a computing power capacity of 1.1 exahashes/second (EH/s) has been shut down since then. Prior to the shutdown, USBTC said that 0.4 EH/s of self-mining was running at the site.

The deal expected to be voted on Wednesday by the city council will limit noise pollution from the facility to 65 decibels. Accommodations will include a "noise dampening wall" and an "independent monitor" that will keep tabs on the noise levels. USBTC will also have to comply with new zoning laws, which pertain to developing or buying renewable energy on par with their energy consumption; it will also pay $150,000 in compliance fees over the next 30 days.

The news was first reported by local media outlet Niagara Gazette.

The Buffalo Ave. facility is the smallest of four that USBTC operates. It also gained access to three more facilities during the Compute North bankruptcy proceedings; two of those it manages in conjunction with Generate Capital.

The firm's access to 680 MW of energy capacity after the Compute North bankruptcy garnered the attention of Canadian Hut 8 Mining (HUT), and the two are now going through an all-stock merger of equals. Hut 8, known for its strategy of retaining its produced bitcoin, has begun selling some its holdings to fund operations.

Asked as to whether the Niagara Falls issue could affect the merger, Erin Dermer, senior vice president of communications and culture at Hut 8, declined to comment.

Niagara Falls resident Bryan Maacks uses his vehicle to protest U.S. Bitcoin Corp's operations. (Eliza Gkritsi/CoinDesk)
Niagara Falls resident Bryan Maacks uses his vehicle to protest U.S. Bitcoin Corp's operations. (Eliza Gkritsi/CoinDesk)

When CoinDesk visited the town last year while the USBTC site was running, a humming could be heard in the vicinity. However, residents that CoinDesk spoke to were divided as to whether it was a problem.

A health worker at a rehab clinic less than a third of a mile from the site told CoinDesk that the noise it wasn't really an issue, except for once when they were doing counselling sessions outdoors. Another resident in the immediate vicinity said that at times it is annoying, but most of the time "it is not that bad."

But some who live further away have claimed that the facility is causing them to lose sleep.

Beverley, who lives about a quarter of a mile away, said she "hasn't slept since it started" operations and that to her, it feels like "living in an airport." Bryan Maacks, who lives about half a mile away, said to him the particular vibration is a constant throbbing hum that he cannot avoid in his own home, even with earplugs.

UPDATE (April 5, 20:00 UTC): Clarifies that Hut 8 is selling bitcoin to fund operations during the merger.

UPDATE (April 6, 05:30 UTC): Clarifies that Hut 8 is selling bitcoin to fund operations during the merger.

Edited by Christie Harkin.


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Eliza Gkritsi

Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.