In response to increasing regulatory pressure and a proposed tax on mining in the United States, Bit Digital plans to expand its operations, moving to Iceland and installing up to 2,500 recently purchased mining rigs.
According to a recent Wall Street Journal report, Bit Digital will be announcing the shipment of new Bitcoin mining devices outside the United States at the Bitcoin 2023 convention in Miami. This will be the company’s first such move in two years.
Samir Tabar, Bit Digital CEO, explained that the main reason for the decision was the currently unclear U.S. regulatory environment and a widespread government attack on digital asset firms in the country:
“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.”
In particular, the Treasury Department of the United States has proposed charging crypto mining companies a tax equal to 30% of the cost of their electricity, contending that miners increase the price of electricity on public energy grids and negatively influence the environment because of their high demand for energy.
Tabar, however, emphasized that over two-thirds of his firm’s cryptocurrency mining operations were already carbon-free and that the planned Icelandic venture would depend primarily on hydroelectric and geothermal sources of energy.
As for the lack of stability within the regulatory environment, this is related to a serious attack on businesses operating within the crypto industry on the part of the SEC. This crackdown is very likely linked to the demise of the FTX digital currency trading platform, but the Securities and Exchange Commission recently stated explicitly that it was under absolutely no obligation to provide any clarification.
In the meantime, the commission has taken Ripple to court, alleging that the blockchain firm unlawfully distributed its XRP token, which they consider to be a form of financial security. However, contentious documents have shown that previous Division Director William Hinman had at one point stated that Ethereum was in fact not a security, despite Commission Chairman Gary Gensler’s assertion that all cryptocurrencies (with the exception of Bitcoin) are securities.