Marathon Digital, a crypto mining company, is initiating a $406 million joint venture (ADGM Entity) with FS Innovation to build and run bitcoin mining operations in Abu Dhabi.
The project’s first phase will be activated with two digital asset mining sites comprising 250 MW. Marathon Digital will own a 20% stake in the company, while FS innovation will hold an 80% stake.
Marathon sees potential in bitcoin
Marathon Digital has a history of running its mining operations on rented facilities and contracts with hosting providers; it closed its balance sheet with $104 million in 2022 after offsetting accrued debts.
The woes of Marathon digital and other mining companies have been compounded by high energy costs and the crypto winter that has forced several crypto mining firms to bite the dust.
Meanwhile, Marathon digital chief executive officer Fred Thiel recently disclosed that the company had made significant progress in increasing its hash rate and getting its energy from a more sustainable source.
According to Fred Thiel, marathon digital has the potential to become the largest crypto mining company in the world, and it’s hoping to engage thousands of miners and drive its capacity to 23 exahash by Q2 of 2023.
Why Abu Dhabi?
Abu Dhabi, the oil-rich capital city of Dubai, has been attracting a lot of crypto-centric entities wishing to scale up operations.
In Nov. 23, 2022, crypto-inclined Sygnum, a Swiss-based digital bank, received approval from the Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA) to operate in the UAE’s capital.
On Nov. 16, 2022, crypto exchange giant Binance got another regulatory approval from the Abu Dhabi authorities to provide its customers with custody service.
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