Chief Commercial Officer Matt Prusak leaving Hut 8 as part of planned transition to Celsius Bitcoin mining company
- None.
- None.
Insights
The departure of Matt Prusak from Hut 8 Corp to become the CEO of a new bitcoin mining company holds significant financial implications for both entities. Hut 8's agreement to provide managed services to the emerging company, particularly in the aftermath of the Celsius Network LLC bankruptcy, may present a strategic revenue stream. The cash management fee of over US$20M per year, above certain operating expenses, indicates a substantial fixed income source for Hut 8, which could bolster its financial stability and provide a buffer against the volatility inherent in the cryptocurrency sector. Additionally, the receipt of restricted stock and incentive equity could align Hut 8's interests with the long-term success of the new mining company, potentially increasing Hut 8's market value if the new venture thrives.
From a financial perspective, the synergy between Hut 8's infrastructure provision and the new company's mining operations could yield economies of scale and operational efficiencies. The involvement of Hut 8's President on the board of the new company also suggests a level of oversight and strategic influence that may benefit Hut 8 shareholders. However, the dependency on the new company's success, particularly in a turbulent crypto market, introduces a risk factor that investors should monitor closely.
The announcement of Matt Prusak's transition and Hut 8's involvement in the Cedarvale project comes at a time when the cryptocurrency mining industry is facing both regulatory and market challenges. The scale of operations Hut 8 will manage, with 12 EH/s of computing capacity and over 300 MW of energy infrastructure, positions the company as a key player in the North American cryptocurrency landscape. This large-scale operation could attract institutional investors who are interested in the infrastructure and operational capabilities within the crypto mining space.
It is also important to consider the industry's response to Hut 8's strategic moves. Competitors may look to form similar partnerships or enhance their service offerings to keep pace, potentially leading to increased market competition. The success of the Cedarvale site, once operational, could serve as a case study for the industry, influencing future business models and partnerships within the realm of digital asset mining and managed services.
The involvement of Hut 8 in the Celsius Network LLC bankruptcy proceedings as a service provider raises legal considerations that are crucial for stakeholders. The structured Mining Management Agreement indicates a careful legal framework designed to protect Hut 8's interests while providing a clear service outline to the new company. The legal stipulations surrounding the cash management fee, restricted stock and incentive equity will be pivotal in defining the long-term relationship between Hut 8 and the new bitcoin mining entity.
Moreover, Hut 8's role in the Cedarvale site's development, from design to RFP coordination, suggests a comprehensive legal agreement that covers a wide array of operational aspects. Legal diligence in these agreements is essential to mitigate risks associated with construction, intellectual property and operational liabilities. The legal intricacies of such partnerships, especially in the dynamic and sometimes uncertain regulatory environment of cryptocurrency, will be a key area for Hut 8 to navigate to ensure compliance and minimize exposure to legal challenges.
Prusak to depart January 31, 2024 to assume role as Chief Executive Officer of new bitcoin mining company to which Hut 8 will provide end-to-end managed services in connection with Celsius Network LLC bankruptcy proceedings
MIAMI, Jan. 26, 2024 (GLOBE NEWSWIRE) -- Hut 8 Corp. (Nasdaq | TSX: HUT), ("Hut 8” or the “Company”) one of North America’s largest, most innovative digital asset mining pioneers and high performance computing infrastructure providers, today announced that Matt Prusak, Chief Commercial Officer of the Company, will depart Hut 8 on January 31, 2024. As previously disclosed in filings from the Celsius Network LLC bankruptcy proceedings, Prusak will assume a new role as Chief Executive Officer of the new bitcoin mining company being formed upon emergence.
Prusak joined Hut 8 on November 30, 2023 after serving as Chief Commercial Officer of USBTC since early 2021, where he spearheaded commercial and innovation strategies, was instrumental in building institutional partnerships, oversaw research and development, scaled the business and team, and led the company’s strategic capital formation, investor relations, government relations, and growth initiatives.
“Matt has a natural ability to navigate complex environments, build powerful partnerships, and drive business growth,” said Jaime Leverton, CEO of Hut 8. “We look forward to working closely with Matt to build a deep, synergistic partnership between our organizations. As the new company’s operating partner, we are excited to leverage our scale and expertise to support their growth and drive value for creditors of Celsius.”
As part of the Celsius Network LLC bankruptcy proceedings, Hut 8 was approved to provide end-to-end managed services for the new company’s operations at five sites in Texas, including the design and development, engineering, financial modeling, budgeting, accounting, construction management, procurement, logistics, and RFP coordination at the fifth and largest site named Cedarvale. It is expected that when construction is complete at Cedarvale, Hut 8 managed services will oversee approximately 12 EH/s of computing capacity and more than 300 MW of energy infrastructure. Under the 4-year Mining Management Agreement, Hut 8 will receive a cash management fee of more than US
As previously announced, Hut 8 closed a merger of equals with U.S. Data Mining Group, Inc. d/b/a US Bitcoin Corp on November 30, 2023 and was selected by Celsius to provide end-to-end development services for the Cedarvale site.
About Hut 8
Through innovation, imagination, and passion, Hut 8 Corp.’s seasoned executive team is bullish on creating value at the intersection of infrastructure and energy through Bitcoin mining and hosting, groundbreaking managed services, energy arbitrage, operating traditional data centers, and capitalizing on emerging technologies like AI and machine learning. Headquartered in Miami, Florida, Hut 8 Corp.’s infrastructure portfolio includes eleven sites: five high performance computing data centers across British Columbia and Ontario that offer cloud, co-location, AI, machine learning, and VFX rendering computing solutions, and six Bitcoin mining, hosting, and managed services sites located in Alberta, New York, Nebraska, and Texas. Long-distinguished for its unique treasury strategy, Hut 8 Corp. has one of the highest inventories of self-mined Bitcoin of any publicly-traded company globally. For more information, visit www.hut8.com and follow us on X (formerly known as Twitter) at @Hut8Corp.
Cautionary Note Regarding Forward–Looking Information
This press release includes "forward-looking information" and "forward-looking statements" within the meaning of Canadian securities laws and United States securities laws, respectively (collectively, "forward-looking information"). All information, other than statements of historical facts, included in this press release that address activities, events or developments that Hut 8 expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion and growth of the business, operations, plans and other such matters is forward-looking information. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "allow", "believe", "estimate", "expect", "predict", "can", "might", "potential", "predict", "is designed to", "likely" or similar expressions. Specifically, such forward-looking information included in this press release includes, but is not limited to, statements relating to the timing of the initiation of development at the Cedarvale, Texas site and the number of megawatts Hut 8 anticipates will be under management by its Managed Services business.
Statements containing forward-looking information are not historical facts, but instead represent management's expectations, estimates and projections regarding future events based on certain material factors and assumptions at the time the statement was made. While considered reasonable by Hut 8 as of the date of this press release, such statements are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to, security and cybersecurity threats and hacks, malicious actors or botnet obtaining control of processing power on the Bitcoin network, further development and acceptance of the Bitcoin network, changes to Bitcoin mining difficulty, loss or destruction of private keys, increases in fees for recording transactions in the Blockchain, erroneous transactions, reliance on a limited number of key employees, reliance on third party mining pool service providers, regulatory changes, classification and tax changes, momentum pricing risk, fraud and failure related to digital asset exchanges, difficulty in obtaining banking services and financing, difficulty in obtaining insurance, permits and licenses, internet and power disruptions, geopolitical events, uncertainty in the development of cryptographic and algorithmic protocols, uncertainty about the acceptance or widespread use of digital assets, failure to anticipate technology innovations, the COVID19 pandemic, climate change, currency risk, lending risk and recovery of potential losses, litigation risk, business integration risk, changes in market demand, changes in network and infrastructure, system interruption, changes in leasing arrangements, failure to achieve intended benefits of power purchase agreements, potential for interrupted delivery, or suspension of the delivery, of energy to the Company's mining sites, and other risks related to the digital asset and data centre business. For a complete list of the factors that could affect the Company, please see the "Risk Factors" section of the Company's Registration Statement on Form S-4 dated November 7, 2023, available under the Company's EDGAR profile at www.sec.gov, in addition to the "Risk Factors" section of the Company's Annual Information Form dated March 9, 2023, and Hut 8's other continuous disclosure documents which are available under the Company's SEDAR+ profile at www.sedarplus.ca and under the Company's EDGAR profile at www.sec.gov.
Hut 8 Corp. Investor Relations
Sue Ennis
sue@hut8.io
Hut 8 Corp. Media Relations
Erin Dermer
erin.dermer@hut8.io
FAQ
When will Matt Prusak depart from Hut 8?
What role will Matt Prusak assume after leaving Hut 8?
What services will Hut 8 provide for the new bitcoin mining company?
What is the expected computing capacity and energy infrastructure Hut 8 will oversee?
What compensation will Hut 8 receive for providing services to the new company?
