Item 1. Business
ITEM 1. BUSINESS
General
We are a vertically-integrated Bitcoin mining company principally engaged in enhancing our power infrastructure to mine Bitcoin in support of the Bitcoin blockchain. We are also exploring the feasibility of developing a portion of our power capacity for AI/HPC uses. We provide comprehensive and critical infrastructure for institutional-scale Bitcoin mining at our large-scale Bitcoin Mining facilities in Rockdale, Texas (the “Rockdale Facility”), Navarro County, Texas (the “Corsicana Facility”), and two Bitcoin mining sites in Paducah, Kentucky (the “Kentucky Facility” and, together with the Rockdale Facility and the Corsicana Facility, our “Facilities”). The Rockdale Facility is believed to be the largest Bitcoin mining facility in North America, as measured by developed capacity. During 2024, we completed Phase I of development of the Corsicana Facility, a second large-scale Bitcoin mining facility, currently equipped to provide up to 400 megawatts (“MW”) of capacity for our Bitcoin Mining. Upon completion, the Corsicana Facility is expected to have approximately one gigawatt (“GW”) of operational capacity available for our business purposes. Additionally, in 2024, we completed a transaction to acquire Block Mining, Inc. (“Block Mining”), a Kentucky-based vertically-integrated Bitcoin miner expanding our Facilities to include two operational sites, in Kentucky, totaling 60 MW of operational capacity with potential to expand up to 155 MW. We intend to expand the two Block Mining sites, targeting 110 MW for self-mining operations in 2025. Through our acquisition of Block Mining (the “Block Mining Acquisition”), we also own a greenfield expansion opportunity, adjacent to an existing substation, presenting us with the ability to develop 60 MW of additional capacity, and the potential to expand up to 150 MW.
In 2024, we adopted and implemented our “Bitcoin Treasury Strategy” strategy, a corporate strategy of acquiring and holding Bitcoin on our balance sheet, and, from time to time, subject to market conditions, issuing debt or equity securities or engaging in other capital raising transactions to fund operations and/or purchase Bitcoin. For more information see “Bitcoin Treasury Strategy” in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report.
We operate in an environment which is frequently evolving based on the proliferation of Bitcoin and cryptocurrencies in general. We have determined that it is in the best interest of our business to undertake a formal process to evaluate the feasibility of developing the approximately 600 MW of remaining power capacity at the Corsicana Facility for AI/HPC uses with the goal of maximizing the potential of our assets. We have engaged a leading consultant in the data center industry to conduct a feasibility assessment of the Corsicana Facility. A significant component of our overall business strategy is to effectively and efficiently allocate capital between opportunities that generate the highest return on investment.
We operate in two reportable business segments: Bitcoin Mining and Engineering, which are organized based on purpose and services performed. Each of our business segments is further discussed herein.
Unless otherwise indicated, amounts in this Annual Report are stated in thousands of U.S. Dollars except for: share, per share, and miner amounts; Bitcoin quantities, prices, and hash rate; cost to mine one Bitcoin; and production value of one Bitcoin mined.
Business Segments
Bitcoin Mining
As of December 31, 2024, our Bitcoin Mining business segment had a total deployed hash rate of 31.5 exahash per second (“EH/s”), as compared to a total deployed hash rate of 12.4 EH/s as of December 31, 2023. In 2024, we mined 4,828 Bitcoin, which represented a decrease of 27.1% compared to the 6,626 Bitcoin we mined in 2023. Based on our existing operations and expected deliveries and deployment of miners we have purchased, we anticipate having approximately 38.4 EH/s of total hash rate in operation by the end of 2025. All amounts are inclusive of the effects of the Block Mining Acquisition.
Our Bitcoin Mining operations are focused on maximizing our ability to successfully mine Bitcoin by growing our hash rate (the amount of computer power we devote to supporting the Bitcoin blockchain), to increase our chances of successfully creating new blocks on the Bitcoin blockchain (a process known as “solving a block”). Generally, the greater share of the Bitcoin blockchain’s total network hash rate (the aggregate hash rate deployed to solving a block on the Bitcoin blockchain) a miner’s hash rate represents, the greater that miner’s chances of solving a block and, therefore, earning the block reward. The current block reward is 3.125 Bitcoin plus transaction fees per block (subject to periodic halving, as discussed below). As the proliferation of Bitcoin continues and the market price for Bitcoin increases, we expect additional miner operators to enter the market in response to an increased demand for Bitcoin. As these new miner operators enter the market and as increasingly powerful miners are deployed in an attempt
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to solve a block, the Bitcoin blockchain’s network hash rate grows, meaning existing miners must increase their hash rate at pace commensurate with the growth of network hash rate to maintain its relative chance of solving a block and earning a block reward. As we expect this trend to continue, we will need to continue growing our hash rate to compete in our dynamic and highly competitive industry.
A key component of the Bitcoin Mining business segment is to acquire highly specialized computer servers (known in the industry as “miners”), which operate application-specific integrated circuit (“ASIC”) chips designed specifically to mine Bitcoin. We deploy such miners at-scale in our Facilities and utilize a combination of air cooled and immersion-cooled environments to maximize miner efficiency. Our Facilities, which are supported by our dedicated best-in-class team, enable our large-scale Bitcoin Mining operations and provide the necessary infrastructure and available power capacity for us to continue scaling our vertically-integrated Bitcoin Mining business. Our miners are some of the most effective and energy-efficient miners available today, and our efficiency is constantly improving as we replace aging miners with new state-of-the-art models. Our miners are deployed in air-cooled environments and in quiet, immersion-cooled environments. By utilizing both methods of cooling we are able to continue growing our hash rate and optimizing our miners’ capabilities. Immersion-cooling provides more efficient heat dissipation and reduced wear-and-tear compared to traditional air-cooled hardware, and with a smaller footprint and lower noise pollution. Air-cooling provides us with greater power benefits as we do not have to divert energy to power the tanks and immersion systems required by immersion-cooling.
During the year ended December 31, 2023, we entered into a long-term master purchase and sales agreement, dated as of June 23, 2023, as amended (the “Master Agreement”), with MicroBT Electronics Technology Co., LTD, through its manufacturing affiliate, SuperAcme Technology (Hong Kong) Limited (collectively, “MicroBT”) to secure the long-term supply of state-of-the-art immersion miners from MicroBT, all of which are being manufactured in the United States. Pursuant to the Master Agreement, MicroBT agreed to provide us with ready access to its newest and most powerful miners, at their most competitive prices. Through December 31, 2024, we executed three purchase orders under the Master Agreement to acquire miners with a total hash rate of 31.4 EH/s, for a total purchase price of approximately $550.1 million. Delivery of the MicroBT miners initially began in the fourth quarter of 2023 and will be completed in monthly batches according to the delivery schedules specified under the applicable purchase order. All miners are expected to be received and deployed by mid-2025. Upon full deployment of these state-of-the-art MicroBT miners, we anticipate a total self-mining hash rate capacity of 38.4 EH/s. We have four additional annual options to purchase miners, on the same or more favorable terms as the second purchase order executed under the Master Agreement, through December 31, 2027 which may be further extended by the production and delivery schedule of any additional purchase orders executed under the Master Agreement. These additional miners represent a total hash rate of approximately 75.0 EH/s, assuming we exercise of all four annual purchase options.
Mining Pools
A “mining pool” is a service operated by a mining pool operator that combines the resources of individual miners to share their processing power across a network. Mining pools were created to address the growing difficulty and network hash rate competing for Bitcoin rewards on the Bitcoin blockchain, providing a way to lower costs and reduce the risk of an individual miner’s mining activities. The mining pool operator provides a service that coordinates the computing power of the independent miners participating in the mining pool. Mining pools are subject to various risks such as disruption and down time. In the event that a pool we utilize experiences down time or is not yielding returns, our results may be impacted.
We utilize a type of mining pool that pays Bitcoin rewards utilizing a “Full-Pay-Per-Share” payout of Bitcoin based on a contractual formula. The formula calculates payouts primarily based on the hash rate we contribute to the mining pool, as a percentage of total network hash rate, along with other inputs. Under this system, we are entitled to receive consideration even if the mining pool operator does not successfully solve a block.
Immersion-cooling
Phase I of the development of the Corsicana Facility involved the construction of 400 MW of immersion-cooled Bitcoin Mining infrastructure. We anticipate that immersion-cooling technology will present many unique opportunities to increase efficiencies in Bitcoin mining and are constantly evaluating new and emerging technologies in the Bitcoin ecosystem to make our mining operations more efficient.
When miners are immersion-cooled, they operate in a more stable environment that is better able to dissipate the heat generated by the miners’ operation, allowing the equipment to run at sustained higher productivity rates for longer periods of time. We are continuing to test our immersion-cooling mining operations and, if our desired performance metrics are achieved, we plan to leverage our infrastructure development capabilities to expand the implementation of our immersion-cooled Bitcoin mining hardware to
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increase our Bitcoin mining hash rate without relying solely on purchasing additional new miners and mining equipment, which we believe will result in increased operating efficiencies, and, thus, improved capital efficiencies.
Engineering
Our Engineering business segment designs and manufactures power distribution equipment and custom engineered electrical products that provide us with the ability to vertically integrate many of the critical electrical components and engineering services necessary for the Corsicana Facility development and Rockdale Facility expansion. This integration helps reduce our execution and counter-party risk in our ongoing and future expansion projects. The specialized talent employed in our Engineering business segment also allows us the opportunity to explore new methods to optimize and develop best-in-class Bitcoin mining operations and has been instrumental in the development of our industrial-scale immersion-cooled Bitcoin mining hardware.
Our Engineering business segment also provides electricity distribution product design, manufacturing, and installation services primarily focused on large-scale commercial and governmental customers and serves a broad scope of clients across a wide range of markets including data center, power generation, utility, water, industrial, and alternative energy. Products are custom built to client and industry specifications.
In December 2024, we acquired E4A Solutions, LLC (“E4A Solutions”), a leading provider of electrical engineering services to a diverse customer base of energy developers and data center operators. This acquisition adds to our vertically integrated strategy by adding engineering expertise to service our own existing and future electrical infrastructure as well as provide solutions and services to the rapidly growing market for electrical infrastructure.
Competition
Our business is highly competitive and operates 24 hours a day, 7 days a week, on a global basis. The primary drivers of competition are demand for Bitcoin, sufficient capital resources to acquire large quantities of high-quality miners, the ability to secure these miners from a limited number of suppliers on rapid delivery schedules, and the ability to execute on those miner deployments with the best-in-class mining infrastructure to generate the highest returns while incurring the lowest costs to mine.
Our competition in the Bitcoin mining space fluctuates due to a number of factors, including, but not limited to, the value of Bitcoin rewards for mining and public perception. See more details below under “Industry Trends”. Our main competitors generally include other large, public Bitcoin mining companies. Additionally, we compete with other Bitcoin miners who participate in mining pools.
Industry Trends
Industry Expansion
The price of Bitcoin increased during the first quarter of 2024 due to a new source of demand, the eleven Bitcoin spot Exchange Traded Funds (“ETFs”), which were approved to begin trading by the SEC on January 11, 2024. Significant interest in the ETFs followed their introduction. One such ETF earned recognition as the fastest ETF ever to surpass $10 billion in assets under management since its launch. The ETFs, as investment vehicles, provide a new access point for investors to gain exposure to Bitcoin through more traditional methods. The price of Bitcoin increased again in the fourth quarter of 2024 to all-time highs based on the results of the United States presidential election.
During 2023 and 2024, the Bitcoin mining industry experienced record growth as the price of Bitcoin increased from the lows seen in early 2023. The rising Bitcoin price created renewed opportunities for public companies to access capital markets to fund growth, leading to unprecedent expansion in mining operations. As a result, the size of provisioned hash calculation services on the network increased, as measured by total hash rate. We expect competition within the mining industry to persist as long as Bitcoin prices remain elevated or continue to rise.
Bitcoin Network Changes and Competition
The Bitcoin mining industry recently experienced an increase in transaction fees on the Bitcoin network, as well as an increase in overall demand for Bitcoin. Various protocols on the Bitcoin network gained popularity during 2023, and at various times temporarily resulted in a significant increase in the transaction fees paid to add a certain Bitcoin transaction to the blockchain. These transaction fees are volatile in nature but are paid directly to miners and are representative of public interest in transacting in Bitcoin. Transaction fees are packaged with the block subsidy issued by the Bitcoin network to combine for the total reward paid to miners upon solving a block.
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The Bitcoin reward issued by the Bitcoin network for solving a block is subject to periodic incremental halving. The network halving is a preprogrammed, fixed process of the Bitcoin network where the Bitcoin reward for solving a block received by miners is reduced by half approximately every four years, resulting in a predictable and controlled inflationary rate. The network halving will continue to occur on this schedule until the amount of Bitcoin in existence reaches the cap of 21 million. Historically, many Bitcoin miners have been a source of selling pressure on Bitcoin as miners have sold their production to fund operations. After each halving, the decrease in the reward provided to miners from the Bitcoin network may result in a decrease in the supply of Bitcoin sold by miners into the market. The network halving occurred in April 2024, cutting the subsidy from 6.25 to 3.125 Bitcoin per block.
Network difficulty, which is a measure of how hard it is for miners to solve a block on the Bitcoin blockchain (and, thus, earn a mining reward), is determined by the network’s total hash rate ( i.e. , the total computational power devoted to solving a block), which is adjusted every 2,016 blocks (with a new block being added approximately every ten minutes). Therefore, as more miners join the network and the network’s global hash rate increases, its difficulty will increase. Conversely, if miners leave the network and its hash rate decreases, its difficulty will decrease. We have observed that when the market price for Bitcoin experiences a sustained increase (as it did throughout 2024), new miners are introduced onto the Bitcoin network, increasing its network hash rate, and network difficulty increases as a result. Thus, despite increasing our hash rate by approximately 154.0% from December 31, 2023, to December 31, 2024, the halving in April 2024 and increased network difficulty following increased network hash rate across the periods resulted in an approximately 27.1% decrease in the number of Bitcoin we mined for the year ended December 31, 2024, as compared to the same period in 2023.
Accordingly, as market prices for Bitcoin increase and more miners and hash rate are drawn onto the Bitcoin network, network difficulty and competition will continue to increase, meaning existing miners like us will need to increase their hash rate to maintain and improve their chances of earning a Bitcoin mining reward. To do this, we continually seek out new Bitcoin Mining capacity, including through our acquisition and development of new Bitcoin Mining facilities (such as the Corsicana Facility and the Block Mining Acquisition) and the electricity supply and distribution facilities to service them, as well as other strategic growth opportunities. Further, we have adopted new and improved technology to increase both our mining power and efficiency, including our industrial-scale adoption of immersion cooling and our strategic acquisitions of large quantities of the newest and most powerful and efficient miners available.
Vertical Integration
Prior to the halving event, shifts in strategy by prominent Bitcoin miners focused on implementing vertically-integrated business models by investing in infrastructure, and upgrading and expanding fleets at their own facilities rather than renting out space from a third-party’s data center. Vertical integration provides additional control over operational outcomes as well as better management of any input costs such as power and overhead fees. Flexibility, and the ability to manage expenses, becomes increasingly important as the amount of competition on the Bitcoin network expands and the subsidy in Bitcoin provided by the network contracts decreases.
The Company has led the industry by focusing on a vertically-integrated business model since 2021. We continue to focus on building long-term stockholder value by taking strategic actions to further vertically-integrate our business at the current Rockdale Facility, developing the Corsicana Facility, and having acquired the Kentucky Facility and E4A Solutions. Management believes a focus on vertical integration will positively affect each of our business segments by providing increased capacity for our Bitcoin Mining operations, more opportunities for implementing our proprietary power strategy, and by positioning us to capitalize on supply chain efficiencies and electrical engineering services garnered through our Engineering segment. We continue to focus on deploying our efficient Bitcoin Mining fleet, at scale, while realizing the benefits of being an owner and operator of our Facilities.
We anticipate the Bitcoin network will continue to see increased competition and consolidation in the Bitcoin mining industry. Further, given our relative position and liquidity, we believe we are well positioned to benefit from such consolidation. We are continuously evaluating opportunities which we may decide to undertake as part of our strategic growth initiatives; however, we can offer no assurances that any strategic opportunities which we decide to undertake will be achieved on the schedule or within the budget we anticipate, if at all, and our business and financial results may change significantly as a result of such strategic growth.
Digital Asset Exchanges
Digital asset exchanges provide trading venues for purchases and sales of Bitcoin. Bitcoin can be exchanged for fiat currencies, such as the U.S. dollar, at rates of exchange determined by market forces on Bitcoin trading platforms, which are not regulated in the same manner as traditional securities exchanges. In addition to these platforms, over-the-counter markets and derivatives markets for Bitcoin also exist. The value of Bitcoin within the market is determined, in part, by the supply of and demand for Bitcoin in the
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global Bitcoin market, market expectations for the adoption of Bitcoin, and the volume of peer-to-peer transactions, among other factors.
The shutdowns of certain digital asset exchanges and trading platforms due to fraud or business failure negatively impacted confidence in the digital asset industry as a whole and led to increased oversight and scrutiny of the industry. We did not have any exposure to any digital asset lenders or exchanges who have declared bankruptcy or have suspended operations. We only hold and sell Bitcoin that we have mined or purchased and do not sell, hold, or redeem any Bitcoin for any other parties. Our Bitcoin is held in cold storage wallets by well-known U.S.-based third-party digital asset-focused custodians.
Custody of our Bitcoin
Our Bitcoin is held in cold storage wallets by well-known U.S.-based third-party digital asset-focused custodians, NYDIG Trust Company LLC (“NYDIG”) and Coinbase, Inc., on behalf of itself and Coinbase Custody Trust Company, LLC, and, if applicable, Coinbase Credit, Inc. or Coinbase Custody International Ltd. (collectively, “Coinbase” and, together with NYDIG, our “Custodians”). We may also sell our Bitcoin using our Custodians’ U.S. brokerage services. The cold storage wallets in which our Bitcoin are held are located in the United States. NYDIG is a standalone trust company organized by an institutional-grade New York City bank, which holds our Bitcoin in trust accounts solely for our benefit. Coinbase is established as a New York Trust Company, a fiduciary under New York state law, and is regulated by the New York Department of Financial Services (“NYDFS”). Any Company funds that may be held by Coinbase are legally segregated at the account, sub-account, and on-chain wallet address level. While we believe that our custodial agreements provide our business with reasonable protections for our operations and the safe storage of our digital assets, we make no assurances that storing our digital assets with either NYDIG or Coinbase is free from risk. To the best of our knowledge, NYDIG and Coinbase safely store our digital assets in segregated accounts as represented in the NYDIG Custodial Agreement and the Coinbase Prime Broker Agreement; however, if either, or both, of our Custodians were to be in breach of its agreement, our digital assets could be compromised. Similarly, if NYDIG or Coinbase were to cease operations, declare insolvency or file for bankruptcy, there is a reasonable risk that recovery of our assets, though kept in segregated accounts, would be delayed or unrecoverable. For further discussion of our custodial agreements, see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report.
Applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial accounts. If our custodied Bitcoin were considered to be the property of our Custodians’ estates in the event that such Custodian were to enter bankruptcy, receivership or similar insolvency proceedings, there is a risk that we could be treated as a general unsecured creditor of such Custodian, inhibiting our ability to access our Bitcoin. Even if we are able to prevent our Bitcoin from being considered the property of a Custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our Bitcoin held by the affected Custodian during the pendency of the insolvency proceedings. To our knowledge, our Custodians have not petitioned for bankruptcy protection, been declared insolvent or bankrupt, made any assignment for the benefit of creditors, or had a receiver appointed for its assets, at any point while we have been a customer. Further, none of our Bitcoin was, as of the time of filing this Annual Report, custodied with any entity that has petitioned for bankruptcy protection, been declared bankrupt or insolvent, made any assignment for the benefit of creditors, or had a receiver appointed for its assets. The recent bankruptcies in the crypto industry and failures of certain financial institutions have not resulted in any loss or misappropriation of any of our Bitcoin nor have such events impacted our access to any of our Bitcoin.
We are not aware of any of our Custodians experiencing excessive redemptions or withdrawals, or having suspended redemptions or withdrawals, of any customer assets (Bitcoin, crypto, or otherwise). Further, we have not experienced any loss of, or access to, our Bitcoin custodied with our Custodians, we have never been unable to account for such Bitcoin assets, and we are not aware of our Custodians having ever been unable to account for our Bitcoin assets or the crypto assets of its other customers.
To the extent we sell any of our Bitcoin custodied with either NYDIG or Coinbase, these transactions are done through the Custodian’s U.S. brokerage services, which are registered with the Financial Crimes Enforcement Network (“FINCEN”) and hold NYDFS Bitlicenses. Such brokered sales are made primarily through market-making transactions with institutional grade investors. While we do not know the identity of the purchasers in such brokered sales of our Bitcoin, each of our Custodians have made all customary representations to us regarding its compliance with all Know Your Customer and Anti-Money Laundering (“KYC/AML”) regulations applicable to such brokered sales of our Bitcoin. Our agreements with such brokerage services require them to comply with all applicable FINCEN and NYDFS rules and regulations, and with respect to the NYDIG Custodial Agreement, the Office of Foreign Assets Control’s rules and regulations, including with respect to KYC/AML.
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Insurance
We maintain property insurance coverage for our mining hardware, buildings, and infrastructure. This includes coverage for business interruption, earthquakes, flood and tornadoes. We also maintain cybersecurity coverage, casualty, general liability, pollution and builders’ risk insurance policies. We believe each Custodian maintains limited insurance policies covering the pool of digital assets it custodies against certain events of loss, such as theft. We do not carry additional insurance coverage on our Bitcoin holdings. We engage our insurance broker annually to solicit underwriters to provide proposals to renew our current coverage or update our policies to meet our needs, prior to the policies’ expiration.
Research and Development
In 2022, we initiated development of the Corsicana Facility to expand our Bitcoin Mining capabilities on a 265-acre site in Navarro County, Texas, located next to the Navarro Switch. Once complete, we expect the Corsicana Facility to have one GW of developed capacity for Bitcoin Mining or for other business purposes.
Phase I of the development of the Corsicana Facility involved the construction of 400 MW of immersion-cooled Bitcoin Mining infrastructure, as well as a high-voltage power substation and transmission facilities to supply power and water to the facility. Construction of Phase I was completed during the year ended December 31, 2024. We are currently evaluating the feasibility of developing the approximately 600 MW of remaining power capacity at the Corsicana Facility for AI/HPC operations.
Materials and Suppliers
We maintain several key supplier relationships that are important to our business for securing mining hardware, infrastructure components and other materials. Due to the complexity of developing mining hardware, only a few suppliers can produce ASICs miners at scale. All of our miner purchases in 2024 were from MicroBT. Our potential purchase orders with MicroBT may have future delivery schedules that extend out many months before those miners are delivered to our Facilities. These delivery timeline fluctuations require us to plan to purchase miners well in advance of their anticipated deployment.
The development and potential expansion of our Facilities require significant quantities of electrical infrastructure components and construction materials. We seek to procure these materials from our suppliers in sufficient quantities to ensure we can deploy miners at scale on accelerated timelines. Additionally, our immersion-cooled Bitcoin Mining activities require large volumes of specialized non-conductive fluid, for which there are limited manufacturers.
Global Logistics
Global supply chain logistics have continued to cause delays across all distribution channels. Similarly, we have also experienced delays in certain miner delivery schedules and infrastructure development schedules due to constraints in the global supply chains for miners, electricity distribution equipment and construction materials. Through the date of this Annual Report, we have effectively mitigated any delivery delays to prevent material impacts on our miner deployment schedule; however, there are no assurances that we will be able to continue mitigating any such delivery delays in the future.
Additionally, the development and potential expansion of our Facilities require large quantities of construction materials, specialized electricity distribution equipment and other component parts that can be difficult to source. To help mitigate global supply chain logistics and pricing concerns, we have procured and hold many of the required materials. We continue to monitor global supply chain developments and assess their potential impact on our expansion plans.
Regulatory
We anticipate that Bitcoin mining will be a focus for potentially increased regulation in both the near- and long-term, and we cannot predict how future regulations may affect our business or operations.
The United States has imposed economic sanctions that affect transactions with designated foreign countries, foreign nationals, and others. The Office of Foreign Assets Control (“OFAC”) is responsible for helping to ensure that U.S. entities do not engage in transactions with certain prohibited parties, as defined by various Executive Orders and acts of Congress. OFAC publishes, and routinely updates, lists of names of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, including the Specially Designated Nationals (“SDNs”) and Blocked Persons List. Our policies prohibit transactions with SDNs, and we take measures to prevent transactions that do not comply with OFAC and other applicable sanctions, including establishing a risk-based compliance program that has policies, procedures and controls designed to prevent us from having unlawful business dealings with prohibited countries, regions, individuals or entities, however, due to the pseudonymous nature of blockchain transactions, and our
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reliance on third-party vendors to identify and prevent transactions with SDNs, we may unknowingly engage in transactions with SDNs, despite our best efforts.
State regulation of Bitcoin mining and related energy consumption is an important consideration with respect to where we conduct our mining operations. The Rockdale Facility and the Corsicana Facility are both located in the State of Texas. To the extent that there is any state regulation of Bitcoin mining or issues relating to the energy grid which may affect Bitcoin mining, we believe the State of Texas is likely to remain one of the most favorable regulatory environments for Bitcoin miners. In 2024, we acquired Block Mining in the Commonwealth of Kentucky, which also maintains a favorable regulatory environment for Bitcoin mining. In 2025, we announced a process for evaluating potential AI/HPC uses for the remaining 600 MW of capacity at the Corsicana Facility. Accordingly, we will monitor potential regulatory developments affecting data centers more broadly and their affiliated energy use.
In March 2024, the SEC issued a final rule requiring climate-related disclosures in public company annual reports and registration statements for the year ending December 31, 2025 for large accelerated filers. We have been evaluating the impact this rule may have on our disclosures, though due to ongoing litigation, the rule has been stayed, and due to the change in administration, we anticipate that the rule may ultimately be rescinded.
In January 2023, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), Office of the Comptroller of the Currency, and FDIC issued a joint statement regarding perceived risks to banks with clients in crypto asset industries. In January 2023, the Federal Reserve also issued a policy statement expanding its regulatory authority to limit the activities of state-chartered banks. Several leaders in the U.S. Congress sent oversight letters to the prudential regulators pushing back on any efforts to place limits on banking activity for digital asset industries. In 2025, legislation and potential rules addressing fair access to banking are being considered to prevent such limitations. To mitigate any potential regulatory risks with respect to financial services, we have diversified our banking relationships to mitigate any potential regulatory risk with respect to financial services.
Additionally, in January 2023, the U.S. House of Representatives announced its first ever Financial Services Subcommittee on Digital Assets, with the intention of developing a regulatory framework for the digital asset industry. In 2024, the U.S. House of Representatives passed a bill titled the Financial Innovation and Technology for the 21 st Century Act, aiming to provide a market structure for digital assets, although it did not receive consideration in the Senate. In January 2025, the House renewed its Subcommittee, and the Senate Banking Committee also announced its own Subcommittee on Digital Assets, with the shared goal of developing a regulatory framework. We anticipate that such a market structure may be considered by both houses of Congress in 2025.
In January 2024, a decade after initial applications were filed, the SEC approved a series of spot Bitcoin exchange-traded funds, which have received billions of dollars of in-flows. In 2025, the SEC established a working group that aims to establish regulatory certainty for digital asset industries.
Also in January 2024, the U.S. Energy Information Administration initiated a provisional survey to collect electricity consumption information from cryptocurrency mining companies operating in the United States. The survey was authorized by the Office of Management and Budget as an emergency data request; however, it was subsequently withdrawn following a successful lawsuit led by us and the Texas Blockchain Council.
In 2023 and 2024, leaders on both the U.S. House Financial Services Committee and U.S. Senate Banking Committee expressed interest in passing legislation to provide additional regulatory authority to address risks related to the use of digital assets in illicit financial activity. The U.S. Treasury Department also requested additional authorities to address such risks. However, we have not seen sufficient support emerge in favor of any particular proposal at this time to anticipate any specific changes. The Trump administration has instead signaled a stronger focus on the benefits of digital assets as opposed to the risks, appointing a first-ever AI and Crypto Czar to foster growth in the industries in the U.S., and so we continue to see insufficient support for any particular proposal to advance additional regulatory measures to address risks in this space at this time.
We are aware that members of the U.S. House Committee on Ways and Means, along with other leaders, are considering changes to the tax treatment of Bitcoin. Potential changes could include taxing Bitcoin like similarly situated commodities at the point of sale, rather than at the point of mining as well as capital gains at the point of sale. Additionally, we are aware of members considering a de minimis exemption for low-dollar Bitcoin transactions similar to the exemption that exists for foreign currencies, which could facilitate broader adoption of the asset at the consumer level.
We are unable to predict the impact that any new standards, legislation, or regulations may have on our business at the time of filing this Annual Report. However, we continue to monitor and proactively engage in dialogue on regulatory and legislative matters related to our industry.
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As the regulatory and legal environment evolves, we may become subject to new laws, such as further regulation by the SEC and other agencies, which may affect our Bitcoin Mining and other activities. For additional discussion regarding our belief about the potential risks that existing and future regulation pose to our business, see Part I, Item 1A. “Risk Factors” of this Annual Report.
Environmental
Concerns have been raised over the quantity of energy used for Bitcoin mining, particularly the environmental effects of energy from non-renewable sources. Many media reports focus exclusively on the energy requirements of Bitcoin mining but fail to include discussion of its positive contributions to other customers on the electrical grid. Bitcoin mining operations can be quickly curtailed, uniquely positioning businesses that engage in Bitcoin mining to respond to increased electricity demand in emergency situations. Throughout 2024, we voluntarily curtailed our operations’ energy consumption to allow our energy providers to redirect our power allotment back into the Electric Reliability Council of Texas (“ERCOT”) and Midcontinent Independent System Operator (“MISO”) markets during extreme weather events. Such actions helped to stabilize the grid by allowing our power allotment to be delivered to the areas of greatest need, such as heating homes and powering hospitals. In exchange for powering down our systems during times of high electricity demand, we receive benefits associated with the difference between our contractual cost of power and the price at which such power is sold on the ERCOT and MISO markets. Additionally, we voluntarily participate in load response programs operated by ERCOT and MISO, whereby we temporarily give ERCOT and MISO the right to curtail a set portion of our power load at their discretion in exchange for a fee. Overall, our operations incentivize the development of new power generation capacity and our actions help to reduce the frequency and impact of power failures and electricity price surges, which benefits are shared by us and all participants in the ERCOT and MISO markets.
Human Capital Resources
During the past year, we have made substantial investments in our workforce to attract and retain best-in-class employees, substantially growing our employee base, while internally promoting individuals to key positions across the Company. As of December 31, 2024, our total workforce consisted of approximately 783 employees across our entire organization, including professionals in engineering, information and technology, construction, manufacturing, finance, legal, communications, and Bitcoin Mining operations. Of our total workforce, approximately 629 employees were in engineering, construction, manufacturing, and Bitcoin Mining operations and approximately 154 employees were in a general or administrative support function, such as information and technology, finance, legal or communications. As of December 31, 2024, approximately 28% of our workforce was in Colorado, 70% was in Texas, and 2% was in Kentucky.
Our human capital resources strategy aims to align the interests of our employees with our key long-term success drivers. To support execution of this strategy, we have implemented a long-term performance incentive program, under which all eligible employees are granted a combination of service-based restricted stock awards that generally vest over a three-year period and performance-based restricted stock awards that are eligible to vest based on achievement of specific performance or total stockholder return milestones. During 2023, certain employees under the long-term performance program were eligible to receive cash in lieu of restricted shares of our common stock awards based on achievement of these same performance milestones. We believe our performance program is a key incentive for our employees aligning their long-term interests with our long-term objectives as an organization.
In addition to our long-term incentive program and competitive cash compensation practices, our employees are provided with excellent health benefits, paid maternal and parental leave, paid time off, and additional benefits.
We recognize the positive impact that leaders within a company can have on their teams, and we believe every employee is and should be a leader within our Company. Consequently, in addition to seeking out top talent from outside of our organization to foster this positive impact, we offer management and executive leadership training and encourage the continuous development of leaders across the Company, and motivate every employee to take ownership over their impact on our success.
We seek to attract a pool of best-in-class candidates and foster their career growth by hiring the best talent available, rather than relying solely on educational background. In support of such initiative, we actively seek candidates from local communities and large cities alike, with a variety of backgrounds and a goal of providing long-term, growth-oriented careers for each employee. We also believe that our ability to retain our workforce is dependent on our ability to foster an environment that is sustainably safe, respectful, and fair.
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Compensation and Benefits
Our compensation programs are designed to provide incentives to attract, retain, and motivate employees to achieve our long-term goals. Specifically, we compare salary and wages against quantitative benchmarks and adjust monetary compensation to ensure wages are competitive and consistent with employee positions, skill levels, experience, and geographic location. We maintain a robust process for ensuring pay equity across the Company and increases in incentives and compensation based on merit and performance.
We provide a comprehensive range of benefits options, including medical, dental, and vision insurance for employees and family members, paid and unpaid leaves, and life and disability/accident insurance coverage. Benefits for employees outside of the United States are provided based on country-specific practices and are intended to support the health and well-being of our employees and their families.
Bitcoin Mining Results
Bitcoin Mining Production, Purchases, and Sales
One way we measure the success of our operations is by the number and U.S. Dollar value of the Bitcoin rewards we earn from our Bitcoin Mining activities. The following table presents information regarding our Bitcoin Mining operations, including production, purchases, and sales of Bitcoin.
Quantity
Amounts
Balance as of January 1, 2022
4,884
$
150,593
Revenue recognized from Bitcoin mined
5,554
156,870
Proceeds from sale of Bitcoin
(3,425)
(79,529)
Exchange of Bitcoin for employee compensation
(39)
(1,495)
Realized gain on sale/exchange of Bitcoin
—
30,346
Impairment of Bitcoin
—
(147,365)
Balance as of December 31, 2022
6,974
109,420
Cumulative effect upon adoption of ASU 2023-08
—
5,994
Revenue recognized from Bitcoin mined
6,626
188,996
Bitcoin receivable
(21)
(878)
Proceeds from sale of Bitcoin
(6,185)
(176,219)
Exchange of Bitcoin for employee compensation
(32)
(869)
Change in fair value of Bitcoin
—
184,734
Balance as of December 31, 2023
7,362
311,178
Revenue recognized from Bitcoin mined
4,828
321,002
Bitcoin receivable
5
(625)
Acquisitions of Bitcoin
5,784
577,500
Proceeds from sale of Bitcoin
(212)
(9,518)
Exchange of Bitcoin for employee compensation
(45)
(2,478)
Change in fair value of Bitcoin
—
457,409
Balance as of December 31, 2024
17,722
$
1,654,468
The Bitcoin rewards earned from our Bitcoin Mining operations were 6,626 Bitcoin in 2023 and 4,828 Bitcoin in 2024, representing a decrease of approximately 27.1%. Revenue recognized from our Bitcoin Mining activities increased from approximately $189.0 million during 2023 to $321.0 million during 2024, representing an increase of approximately 69.8%. The increase in revenue was primarily due to an increase in Bitcoin prices and rewards earned as a result of an increase in our deployed hash rate of 12.4 EH/s as of December 31, 2023, to 31.5 EH/s as of December 31, 2024, partially offset by the impact of the halving in April 2024.
Factors Affecting Profitability
Market Price of Bitcoin
Our business is heavily dependent on the spot price of Bitcoin. The prices of cryptocurrencies, including Bitcoin, have experienced substantial volatility, meaning that high or low prices may be based on speculation and incomplete information, subject to rapidly changing investor sentiment, and influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting. Bitcoin (as well as other cryptocurrencies) may have value based on various factors, including,
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but not limited to, their acceptance as a means of exchange by consumers and producers, scarcity, and market demand, all of which are beyond our control.
Halving
Further affecting the industry, particularly for the Bitcoin blockchain, the Bitcoin reward for solving a block is subject to periodic incremental halving. The reward was initially set at 50 Bitcoin currency rewards per block. The Bitcoin blockchain has undergone four halving events since its inception on the following dates: (1) on November 28, 2012, at block height 210,000; (2) on July 9, 2016, at block height 420,000; (3) on May 11, 2020, at block height 630,000; and (4) on April 19, 2024 at block height 840,000, when the reward was reduced to its current level of 3.125 Bitcoin per block. The next halving for the Bitcoin blockchain is currently anticipated to occur in mid-2028 at block height 1,050,000. Many factors influence the price of Bitcoin, and potential increases or decreases in prices in advance of or following a future halving is unknown.
Network Hash Rate and Difficulty
A Bitcoin miner’s probability of solving a block on the Bitcoin blockchain and earning a Bitcoin reward generally depends on the miner’s hash rate in relation to the global network hash rate. As more powerful miners have been deployed, the Bitcoin network’s difficulty has consequently increased. Network difficulty is adjusted every 2,016 blocks (approximately every 2 weeks) to maintain an average time of approximately ten minutes between each block validation. A higher network difficulty means more computational power is required to solve a block and earn a Bitcoin reward. This, in turn, makes the Bitcoin network more secure by limiting the possibility of one miner or mining pool gaining control of the network. Therefore, as new and existing miners increase their hash rate, the global network hash rate will continue to grow, meaning a miner’s share of the global network hash rate will decline if it fails to deploy additional hash rate at scale with the industry.
For further discussion of the factors affecting our profitability, see the discussion under Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Summary of Bitcoin Activity” of this Annual Report, as well as the discussion of various risks, factors, and uncertainties we believe may affect our revenue and results of operations under Part I, Item 1A. “Risk Factors” of this Annual Report.
Performance Metrics
We aim to mine Bitcoin by utilizing our miners to solve blocks. In exchange for solving a block, we receive a Bitcoin reward, which we can either hold or sell on the market to generate cash.
Hash Rate
Bitcoin miners typically measure their performance in terms of hash rate, which is the number of cryptographic hashing algorithms solved (or “hashes”) per second. Generally, miners (or mining pools) with a greater hash rate relative to the global Bitcoin network hash rate at a given time will, over time, have a greater chance of earning a Bitcoin reward, as compared to miners with relatively lower total hash rates.
However, as the relative market price of Bitcoin increases, more miners are incentivized to mine Bitcoin, which increases the global network hash rate. Therefore, to remain competitive, miners seek to continually increase their total hash rate, creating a feedback loop: as Bitcoin gains popularity and its relative market price increases, more miners attempt to mine Bitcoin and its global network hash rate is increased; in response, existing miners and new miners devote more and more hash rate to the Bitcoin blockchain by adding more, and increasingly powerful, miners to attempt to ensure their ability to earn additional Bitcoin rewards. As a result, the network difficulty of the Bitcoin network is increased to maintain the pace of new block additions, spurring miners to seek to deploy yet further hash rate to earn the same relative number of new Bitcoin rewards. In theory, this process should continually replicate itself until the supply of available Bitcoin is exhausted.
Miners have attempted to boost their hash rate by deploying increasingly sophisticated miners in larger quantities. This has led to an “arms race” within the Bitcoin mining industry. There are very few miner manufacturers capable of producing the necessary number of high-quality miners to meet this demand, creating scarcity and driving up prices. Furthermore, it has been noted that some manufacturers may increase prices for new miners in response to the rising market price of Bitcoin.
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Intellectual Property
We actively utilize specific hardware and software for our Bitcoin Mining operations. The Bitcoin blockchain is primarily built on open-source code and, in certain cases, the source code and other software assets we use in our Bitcoin Mining operations may be subject to an open-source license. For these works, we adhere to the terms of any license agreements that may be in place.
We currently rely on trade secrets, trademarks, service marks, trade names, copyrights, and other intellectual property rights. Additionally, we may obtain licenses to use intellectual property rights owned and controlled by others. Furthermore, we have developed and may continue to develop certain proprietary software and hardware applications in connection with Bitcoin Mining operations, including our immersion-cooled Bitcoin Mining developments.
Information About Our Executive Officers
The following sets forth the name, age, and position of each of the persons who were serving as executive officers as of the filing of this Annual Report.
Name
Age
Position
Jason Les
39
Director and Chief Executive Officer (principal executive officer)
Benjamin Yi
42
Director and Executive Chairman
Colin Yee
49
Executive Vice President, Chief Financial Officer (principal financial officer)
William Jackman
41
Executive Vice President, General Counsel and Secretary
Jason Chung
43
Executive Vice President, Head of Corporate Development & Strategy
Ryan Werner
45
Senior Vice President, Chief Accounting Officer (principal accounting officer)
Stephen Howell
49
Senior Vice President, Chief Operating Officer
Jason Les (age 39) has served as our Chief Executive Officer (“CEO”) since February 2021 and as a member of our Board of Directors (“Board”) since November 2017. He has been deeply involved with Bitcoin since 2013, with significant experience in Bitcoin mining, as an engineer studying protocol development, and contributing to open-source projects. Mr. Les was previously a founding partner of Binary Digital from May 2017 to November 2020, a software-development company where he led the engineering team and coordinated project development for artificial intelligence, reverse engineering, and inter-software compatibility projects. Additionally, his background includes over a decade of unique experience as a former professional heads-up poker player. He holds a Bachelor of Science, Computer Science from the University of California, Irvine.
Benjamin Yi (age 42) has served as our Executive Chairman since May 2021, as a member of the Board since October 2018, and as Chairman of the Board from November 2020 through May 2021. In this role, he is directly involved in our day-to-day operations, playing a key role in setting and fulfilling the Board’s strategic aims for the Company. Mr. Yi brings significant corporate governance experience to Riot’s Board and executive management team, having served as an independent director and committee chair of several private and public companies. Prior to joining Riot, Mr. Yi led capital markets and corporate development at IOU Financial, a fin-tech enabled lender to small businesses across North America and investee company of Neuberger Berman from January 2017 through May 2021. Mr. Yi brings almost two decades of unique capital markets experience to the Company, and a particular expertise in fintech, specialty finance, and investing throughout a company’s capital structure. Mr. Yi holds a Bachelor of Commerce, specialist in Finance, major in Economics from University of Trinity College and a Master of Finance from University of Toronto – Rotman School of Management.
Colin Yee (age 49) has served as our Executive Vice President, Chief Financial Officer (“EVP-CFO”) since July 2023, and served as our Chief Financial Officer from September 2022 to July 2023. Previously, he was our Head of Corporate and Financial Operations from April 2022 to September 2022. Prior to joining Riot, Mr. Yee founded Clear Capital Management Corporation which has been operating since September 2007. He served as the Chief Operating Financial Officer of Avebury Partners, a leading asset management firm that operates within the real estate, geothermal exchange, and construction sectors, from March 2021 to March 2022. From 2016 to 2021, Mr. Yee served as the CFO for Forum Equity Partners, a large private equity firm specializing in real estate, renewable energy and infrastructure. Mr. Yee is a Chartered Professional Accountant and holds a Bachelor of Science in Cellular Biology and a Bachelor of Commerce in Accounting from the University of Calgary.
William Jackman (age 41) has served as our Executive Vice President, General Counsel and Secretary, (“EVP-General Counsel”) since September 2022, and as General Counsel and Secretary since July 2021. As a member of the executive team, Mr. Jackman manages the Company’s legal affairs, drawing upon his unique business and legal acumen to navigate strategic decisions and develop innovative solutions to complex challenges. Previously, Mr. Jackman represented S&P 500 companies as well as other public companies in the areas of securities laws, mergers and acquisitions, and power generation. Prior to joining Riot, Mr. Jackman was a
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Leader of Public Companies and Securities at Roger Towers, P.A., one of Florida’s oldest and most established law firms, from March 2018 to January 2022. Additionally, he was a Senior Corporate Attorney at Holland & Knight LLP, a multinational law firm, from May 2014 through August 2017. Mr. Jackman holds dual Juris Doctorate law degrees from the Universities of Windsor and Detroit, as well as an MBA from Nova Southeastern, and is a member of the New York, Florida, and Ontario Bar Associations.
Jason Chung (age 43) has served as our Executive Vice President, Head of Corporate Development & Strategy (“EVP-Head of Corporate Development & Strategy”) since July 2023, and Head of Corporate Development & Strategy from June 2022 to July 2023. Mr. Chung spearheads the coordination of Riot's corporate development, capital markets, and investor relations efforts. Mr. Chung brings two decades of experience in investment banking and a wealth of knowledge in corporate finance to Riot. Prior to joining Riot, Mr. Chung served as Managing Director, M&A, at Nomura Holdings, Inc. from March 2017 through June 2022 and Executive Director, Mergers & Acquisitions from March 2014 through December 2016 where he advised global clients on cross-border transactions in the technology sector across multiple countries, including the US, Canada, Germany, Japan, Korea, France, and Singapore . Mr. Chung’s investment banking career spanned nearly $20 billion in mergers and acquisitions transactions and included building and growing advisory teams. Mr. Chung is a CFA charter holder and earned a Bachelor of Commerce and Finance degree, minoring in History, from the University of Toronto.
Ryan Werner (age 45) has served as our Senior Vice President and Chief Accounting Officer since September 2022. Previously, Mr. Werner served as our Vice President of Finance from March 2021 to September 2022. Mr. Werner is responsible for the leadership and oversight of our public accounting function, leading the Company’s team of accounting and finance professionals. Prior to joining Riot, Mr. Werner was a Senior Director, Real Estate and Transactions Accounting at UDR, an S&P 500 constituent and multifamily real estate investment trust, from March 2013 through March 2021. Mr. Werner began his career in Ernst & Young’s audit practice, where he was a Senior Manager and specialized in publicly traded companies. Mr. Werner is a Certified Public Accountant and holds a Master of Accounting and Information Systems degree, as well as a Bachelor of Science in Accounting & Business Administration degree, both from the University of Kansas.
Stephen Howell (age 49) has served as our Senior Vice President and Chief Operating Officer (“COO”) since June 2024. Mr. Howell has also served as Chief Executive Officer at ESS Metron, LLC (“ESS Metron”), a leading manufacturer of power distribution centers, portable substations, low and medium voltage switchgear, custom controls and relays since December 2021. Previously, Mr. Howell served as Director of Business Development – South at ESS Metron from October 2019 through December 2021. Prior to his role at ESS Metron, Mr. Howell served as VP, Senior Sales Representative at Castleman Power Systems International, LLC, a power developer and technology solutions provider, from October 2011 through October 2019. From January 2006 through October 2011, Mr. Howell served as Outside Sales Executive for Consolidated Electrical Distributors, an electrical solutions distributor and product supplier. Mr. Howell served as Estimator and Project Manager for Integrated Electrical Services Holdings, Inc., an integrated electrical design and installation company from January 2004 through January 2006, and as Outside Sales Engineer at Eaton Corporation plc, a power management and electrical systems company from January 2000 through January 2004. Mr. Howell holds dual Bachelor of Science degrees in industrial distribution and marketing from the University of Alabama at Birmingham.
There are no familial relationships among our executive officers and any directors. There are no arrangements or understandings between any of our executive officers and any other person pursuant to which any of such executive officers were selected.
Corporate Information
Our principal executive office is located at 3855 Ambrosia Street, Suite 301, Castle Rock, Colorado 80109, and our telephone number is (303) 794-2000. Our records are kept at our principal executive office.
We were incorporated in the State of Colorado on July 24, 2000, under the name AspenBio, Inc., and have been through a number of subsequent name changes. Effective October 19, 2017, we adopted the corporate name Riot Blockchain, Inc., and changed our state of incorporation to Nevada. Effective December 30, 2022, we adopted our current corporate name, Riot Platforms, Inc., and remained incorporated in Nevada.
Our website address is www.riotplatforms.com.
Additional Information
We file or furnish periodic reports and amendments thereto, including our annual reports on Form 10-K, proxy statements, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information with the SEC. These reports, and any amendments thereto, as filed with the SEC, can be accessed, free of charge, on the SEC’s website www.sec.gov. These documents may also be accessed on our website: www.riotplatforms.com through a link in the “Investors” section. The contemplated documents
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are placed on our website as soon as reasonably practicable after their filing with the SEC. The information posted on our website is not incorporated by reference into this Annual Report.