Squire Mining Ltd., a listed issuer on the Canadian Stock Exchange, announced on Friday that is has entered an agreement to acquire crypto mining assets owned by CoinGeek and its affiliates, paving the way for the formation of the largest publicly-owned crypto mining operation in the world—henceforth known as CoinGeek Technologies Ltd.
Under the deal, Squire will take under its wing CoinGeek assets consisting of 62,440 ASIC mining rigs, representing an estimated 960,000 terahash/s or about 90MW of power consumption. These assets are operated by host providers across the United States, with 35,940 rigs, as well as Canada (6,000 rigs), and Kazakhstan (20,500 rigs). The crypto mining assets have an all-in weighted operational cost of US$0.073 per kilowatt hour.
The deal is valued at CAD$60.3 million (US$45.33 million), consisting of 114.8 million Squire common shares worth CAD$34.4 million (US$25.86 million) based on the Nov. 29 closing price of CAD$0.30 (US$0.23) per share. CoinGeek will also receive an unsecured vendor-take-back note worth CAD$25.8 million (US$19.4 million), which it can convert into additional Squire common shares. CoinGeek, for its part, has agreed to enter into a voluntary one-year lock up on the common shares it received.
As part of the agreement, Squire will be taking on CoinGeek’s employees and consultants who are involved with the management and operation of the assets, as well as the CoinGeek.com website and domain, along with all the marketing and advertising assets related to the CoinGeek name.
The Canadian company is also acquiring CoinGeek’s outstanding global distribution agreement for Squire’s ASIC chips and rigs. Earlier this year, Squire granted associates of CoinGeek the exclusive right to market, promote, solicit, sell and distribute Squire’s new ASIC chips and mining rigs to Bitcoin SV and other alt coin miners throughout the world.
Taras Kulyk, chief executive officer at Squire, said: “This transaction would provide Squire with a leading, recognized brand via the acquisition of the CoinGeek.com and CoinGeek name, but it would also make us the largest, publicly traded Bitcoin miner globally. It is expected to deliver significant shareholder value by enabling Squire to become vertically integrated with our growing chip design and manufacturing business, which we would seek to have commercial within 2019.”
“I believe the next phase of growth for this industry is upon us and that means massive scaling of the Bitcoin blockchain to accommodate the throughput needed for enterprises to make use of this technology. By vending my mining and CoinGeek branded assets into Squire, I would be doubling-down on my commitment to Bitcoin’s success. These assets would enable Squire Mining Ltd to compete at a global level to pave a path for enterprise usage of blockchain technology to flourish,” said Calvin Ayre, owner of the CoinGeek brand.
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Nasdaq is set to acquire Sweden-based trading solutions provider Cinnober, in a deal that could see the stock exchange move into helping institutional investors gain access to new opportunities around cryptocurrency.
The move, announced last week, involves a $190 million all cash recommended public offer to Cinnober shareholders and warrant holders from Nasdaq. It plans to fund the acquisition with cash on hand or liquidity available under existing credit facilities.
It comes as the latest indication of Nasdaq’s growing interest in cryptocurrency trading and related services. Following the U.S. Securities and Exchange Commission’s (SEC) rejection of the latest Winklevoss crypto exchange traded fund (ETF) proposals, Nasdaq reportedly met with a panel of cryptocurrency experts to discuss ways of legitimising the sector, and of finding ways to placate the requirements of the SEC.
The acquisition will see Nasdaq take control of Cinnober, a firm with a reputation for bullishness around digital assets. Cinnober’s strategic partnership with cryptocurrency custodian BitGo also looks to be of interest to Nasdaq, for its appeal to institutional investors.
Custodianship has become an increasingly prominent issue amongst institutional investors, who are wary of deploying capital without solid security and custodial services in place.
With recent high profile hacks, including the Bancor exchange attack in June, some analysts have suggested these fears might be well placed. With its cryptocurrency custody service ready to go for institutional investors, the Cinnober acquisition therefore eliminates this barrier to market for Nasdaq in attracting institutional clients to invest in digital assets.
Nasdaq CEO and President Adena Friedman said the acquisition would allow the group to capitalise on new opportunities around cryptocurrencies and other digital assets.
“The combined intellectual capital, technology competence and capabilities of Cinnober and our Market Technology business will expand the breadth and depth of our fastest growing division at Nasdaq,” Friedman said in a statement. “This acquisition will enhance our ability to serve market infrastructure operators worldwide, and will accelerate our ability to expand into new growth segments.”
The acquisition comes at a time when large financial institutions are increasingly developing their custody services, with Bank of America and Citigroup announcing similar plans in recent months. Purchasing Cinnober will likely help position Nasdaq in this market, as well as marking their progress towards offering a more comprehensive lineup of crypto services.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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