NYDIG Set to Expand Bitcoin Hashrate with Coinmint Investment
New York-based Bitcoin asset manager NYDIG appears to be ramping up its proprietary mining hashrate following a recent investment in Bitcoin mine operator Coinmint.
In October, local media in Massena, New York, where Coinmint operates its primary Bitcoin mining facility, reported that NYDIG had made a strategic investment to help Coinmint expand its operations. NYDIG is also one of Coinmint’s largest hosting customers.
Last week, Mintvest Capital—a firm claiming an 18.2% stake in Coinmint—filed a lawsuit against NYDIG in the U.S. District Court of Puerto Rico, where Coinmint is based. The complaint alleges, citing “information and belief,” that NYDIG acquired Coinmint for $200 million but failed to compensate Mintvest for its stake in the company. Mintvest is demanding $36 million from NYDIG.
NYDIG has declined to comment on the case or clarify its investment in Coinmint. Regardless, recent developments indicate that NYDIG may be taking over vacant power capacity at Coinmint’s facilities to expand its proprietary mining operations.
Several former Coinmint customers, including Bit Digital (NASDAQ: BTBT), Gryphon Digital Mining, and CleanSpark, announced last month that they would not renew their hosting contracts with Coinmint after 2024. This departure has freed up approximately 110 megawatts of Bitcoin mining capacity for NYDIG.
Coinmint’s potential expansion comes in the wake of new Bitcoin mining regulations passed in September 2024 by the town of Massena. These regulations lifted a long-standing moratorium and allowed companies like Coinmint to increase their capacity in the region.
Mintvest’s complaint claims that NYDIG expressed interest in purchasing Coinmint in early 2023. Following the bear market of 2022, NYDIG took control of a large number of collateralized Bitcoin miners from borrowers who defaulted on equipment loans. In June 2023, NYDIG imported approximately 900 PH/s of Antminer S19XP units, according to U.S. shipment records cited by TheEnergyMag.
Mintvest, Coinmint Dispute
Coinmint was founded in 2016 by Ashton Soniat and Prieur Leary III through Coinmint Living Trust (CLT) and Mintvest Capital, respectively. Over the years, disputes arose between the two partners over Mintvest’s stake in the company, leading to multiple lawsuits.
In 2019, Mintvest filed a lawsuit in Delaware seeking to dissolve Coinmint and nullify its conversion from a Delaware entity to a Puerto Rico entity. The Delaware court ruled against Mintvest, finding that Leary and Mintvest had harmed Coinmint by disclosing confidential information and interfering with company operations.
In August 2021, Coinmint issued a “Repurchase Notice” to Mintvest, claiming Mintvest had breached their operating agreement as adjudicated in the Delaware court. Coinmint argued that this breach triggered its right to repurchase all of Mintvest’s membership interests. When Mintvest rejected the repurchase, Coinmint filed a lawsuit in Texas.
A Texas trial court sided with Coinmint, issuing a declaratory judgment that Mintvest’s actions violated the operating agreement. On appeal, the 14th Court of Appeals in Texas partially reversed the judgment in March 2024, overturning an $88,034 award for actual damages and $8,948 in attorney fees while upholding the remainder of the ruling. The court emphasized that Mintvest had failed to challenge the most significant aspects of the trial court’s findings, including the breach of the operating agreement.
