Ukrainian-owned US steel plant caught mining BTC: reports

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A Kentucky steel plant owned by Ukrainian oligarch Ihor Kolomoisky has been quietly mining BTC after it shut down operations and laid off staff over the summer, according to a report by news outlet Radio Liberty.

Kolomoisky, the controversial billionaire and former governor of the Dnipropetrovsk, operated the plant through his Calvert City, Ky.-based CC Metals & Alloys (CCMA) business entity. He and his business partner Gennady Bogolyubov first purchased it in 2011 for $188 million as a part of their plan to build their metal business in the United States.

On July 1, 2020, the company announced it was shutting down its ferrosilicon production operations because of unfavorable market conditions brought about by the economic impact of the COVID-19 pandemic. 

Shortly after that announcement, the U.S. Department of Justice accused both partners of buying real estate and businesses in the country with money illegally misappropriated from PrivatBank from 2008 to 2016. The DOJ sought to confiscate two commercial buildings purchased by the oligarchs, one in Kentucky and one in Texas. 

The partners owned PrivatBank before the National Bank of Ukraine nationalized it. Kolomoisky and Bogolyubov have denied these allegations. Both said they bought assets in the United States using the $2 billion they earned from selling their steel business in Ukraine. 

Local workers had hoped that the plant would restart once economic conditions improved. CCMA is one of only three plants in the United States that produces ferrosilicon, an alloy of iron and silicon, used primarily in steelmaking to increase its strength. Historically, it’s been profitable. 

Employees had become accustomed to the industry’s fickle nature, where workers are often furloughed only to be brought back at a later date.  

Per the report, workers now say that the only thing being worked on at the plant is the mining of digital currencies. The report alleges that one of the company’s redesigned warehouses is filled with ASIC mining rigs, while the plant’s primary production is at a standstill. 

They brought mining hardware to the plant “in whole trucks,” one of the plant’s employees told the news website, Radio Svoboda. 

Workers also suspect that the ongoing cloud of suspicion from the DOJ hanging over the company’s owners may be the primary reason for the lack of plans to restart the plant. A judge adjourned the DOJ case because a key witness suffered a stroke on November 16. Even before the DOJ announcement, Kolomoisky’s two Miami-based partners had both of their offices searched by the FBI in August. 

See also: TAAL’s Jerry Chan presentation at CoinGeek Live, The Shift from Bitcoin “Miners” to “Transaction Processors”