Amid growing regulatory pressure and a proposed cryptocurrency mining tax in the United States, New York-based Bitcoin (BTC) mining company Bit Digital is expanding its infrastructure in Iceland, placing as many as 2,500 newly bought mining machines there.
Specifically, Bit Digital plans to announce the sending of the new Bitcoin mining computers outside the US, in the first move of its kind for this company in two years, at the Bitcoin 2023 conference in Miami, according to a report by the Wall Street Journal on May 18.
As Samir Tabar, chief executive of Bit Digital, explained, the reason behind this major decision was the current regulatory uncertainty and a broader government crackdown on digital asset companies in the US:
“What we’ve done in the past is the machines come to the United States, but now instead of doing that, we have to look at different jurisdictions due to instability. (…) We have to take that seriously.”
Notably, the US Treasury Department has introduced the possibility of taxing cryptocurrency mining firms 30% of their costs of electricity, arguing that miners raise the electricity costs on shared grids, as well as have a negative impact on the environment due to the high power demand.
However, Tabar highlighted that more than two-thirds of his company’s crypto mining operations were carbon-free, as well as that the announced Iceland operation would rely mainly on hydroelectric and geothermal power sources.
As for the regulatory instability, it concerns a major government crackdown on companies in the crypto industry triggered by the collapse of the crypto trading platform FTX. Recently, the US Securities and Exchange Commission (SEC) itself has openly stated it was under no obligation to provide clarity.
Meanwhile, the regulator is battling Ripple in court, claiming the blockchain company had illegally sold the XRP token, which the SEC views as a security. However, controversial documents reveal that former SEC Division Director William Hinman had earlier said Ethereum (ETH) was not a security, despite SEC boss Gary Gensler stating that all cryptos except Bitcoin (BTC) are securities.