A Vancouver company has been ordered to pay more than $400,000 in fines and court costs for owning multiple unapproved cryptocurrency mines in Alberta.
The Alberta Public Utilities Commission investigated Green Block Mining after residents from 10 households complained about noise from the natural gas plant near Greystone Manor in Sturgeon County, north of Edmonton.
The commission found that the company, formerly known as Link Global, installed four 1.25 megawatt gas generators on its premises to power the computer servers that were mining the digital currency. I discovered something.
It was also discovered that the company has two other factories. One is in Territory 3 in southern Alberta, and the other is in Westlock County, north of Edmonton.
According to AUC, all power plants have been shut down since 2021.
“Albertans were protected from the consequences of non-compliance with the Green Block because the power plants in question were not allowed to operate while the litigation proceeded,” the commission told CBC News in an email Tuesday. Ta.
In December, the AUC approved a settlement agreement between the commission’s independent enforcement staff and the company.
The agreement stipulates that Green Block must pay an administrative penalty of $346,500, which will be contributed to the state’s general fund, and $60,000 in legal costs for the commission’s enforcement staff.
The company has agreed to cease operations in Alberta and never do business in the province.
“It’s good that they ended up paying the fine,” said Alfred Lehar, a professor at the University of Calgary’s Haskayne School of Management. “I think the government should go after those who set up illegal operations. ” he said.
Lehar, who specializes in cryptocurrencies and corporate finance, said most Bitcoin mining companies in the industry follow the rules and this case is an outlier.
Larger fine than originally proposed
The commission originally proposed paying Greenbloc more than $7 million.
AUC’s enforcement team has argued that the company received significant financial benefits from not following the rules, according to financial records included in an affidavit filed this fall by company director Kevin Marr. Green Block appears to be in a precarious financial position.
Ma’s affidavit also states that the company has never engaged in Bitcoin mining at any of its facilities in Alberta, either alone or as part of a joint mining arrangement with another entity. AUC said in its decision.
AUC said enforcement officials initially estimated the economic benefit based on limited public information, but now they have a better understanding of the corporate structure of the entity operating the facility.
Complaints from residents of Greystone Manor led AUC to investigate Green Block Mining, formerly known as Link Global. (Craig Ryan/CBC)
The commission said the company had not yet produced the audited financial statements needed to determine how much profit it made from its operations.
The company’s pending financial statements show total revenue of $1.4 million in 2020 and $520,164 in 2021.
Filing the statement is a mandatory condition of the settlement agreement. If the audited statements differ from the unconfirmed statements, the Commission may initiate new legal proceedings against the company.
The natural gas plant that powered the Bitcoin mining facility was located 2,000 feet west of the Greystone Manor home in Sturgeon County, Alta. (Hayley Farcaro/CBC)
Green Block has also been subject to a cease-and-desist order from the British Columbia Securities Commission, effective July 2022.
According to the order, the company failed to submit required documents, including audited financial statements for 2021.
Nigel Banks, a retired law professor at the University of Calgary, is not involved in the case but said he has read the commission’s recent decision and would be surprised if the AUC launches a new case against the company. .
“It doesn’t appear to be a particularly stable financial company,” he said in an interview.
Banks said the AUC is also running out of time to complete the process, as the Alberta Public Utilities Commission Act has a three-year statute of limitations.
Payment deadline extension
Green Block was ordered to pay the fine within 30 days of the Dec. 21 decision.
The company paid its legal costs and paid a portion of the $140,000 to the state’s general fund.
But Green Block told the committee the company is currently insolvent and will have difficulty raising money in B.C. to pay Alberta’s regulatory fines.
This week, the commission extended the payment deadline to February 21st.
Residents of Sturgeon County’s Greystone Manor neighborhood filed a complaint after hearing noise from an unapproved cryptocurrency mine. The mine, which closed in 2021, was previously located in a natural gas rig near their home. (Craig Ryan/CBC)
The company’s lawyer, Gavin Fitch, told CBC in an emailed statement that Green Block intends to pay the remaining penalty and “looks forward to resolving this matter.” .
Fitch said the company acknowledged it had “made mistakes regarding its operations in Alberta” and had not profited from its operations in the province.
More mines coming?
Supporters of bitcoin mining like Lehar say the industry could bring more jobs to Alberta, which has cheap electricity and a large number of abandoned oil and gas rigs. claims.
But critics have raised concerns about the environmental impact of bitcoin mining, and some states have placed restrictions on new cryptocurrency mining projects due to concerns about power usage.
Sturgeon County, home to one of Green Block’s unapproved factories, has decided to allow limited cryptocurrency mining in 2022.
The county told CBC News a small number of companies have expressed interest in operating cryptocurrency mines at oil and gas rigs, but no permits have been issued.
AUC said it is aware of other encryption facilities associated with power plants but does not track approvals.