CryptoWatt fires up crypto mine amid owner’s fraud woes

CryptoWatt mining farm has resumed operations weeks after authorities shut it down in December last year. The farm was shut down following legal woes facing its majority owner, Matthew Goettsche who’s accused of orchestrating a $722 million crypto mining scam. The mining facility is now under its part owner and its manager.

Based in the city of Butte in Montana, the facility got embroiled in a legal battle facing its owner last year. Goettsche, who owns over 50% of the operation is accused of being one of the operators of BitClub Network. The firm posed as a crypto mining company, with investors purchasing cloud mining equipment and earning crypto in return. Five years later, thousands of investors had lost over $722 million to the scam. Four of the leaders of the company were arrested, among them Goettsche.

Following his arrest, CryptoWatt was shut down by the authorities. At the time, the minority owner Kevin Washington and the manager Rick Tabish vowed to fight and have the ruling overturned. They have succeeded in their quest, announcing that the facility has resumed operations in a press release on January 28.

The power was turned back on this week, bringing to life over 35,000 servers housed in seven buildings. The management intends to buy even more miners and is currently seeking to raise $45 million for this. With the halving set to take place in a few months, the company believes that it must invest in the miners before then to compensate for the revenue that will be lost due to the event. CryptoWatt employs 30 staff members in its facility.

The reopening of the firm is testament to the fact that Goettsche’s alleged illegal activities didn’t extend to CryptoWatt. As the Montana Standard reported at the time, the firm’s management had pointed this out, with Tabish stating, “The nefarious acts of the owner involving a completely separate entity should not victimize loyal local workers.”

Goettsche’s legal fate is still uncertain at this point. However, a lot of damning evidence has been presented to court by prosecutors. It includes conversations between him and the other directors where he laid out his plan to defraud investors, inflate the company’s value and drop the crypto mining earnings at will. “We are building this whole model on the back of idiots,” he allegedly stated.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.