In response to the Biden administration’s proposed crypto mining tax, Bit Digital has strategically moved a large portion of its mining machinery to Iceland and Canada while keeping the majority within the United States.
The Company’s decision to establish a presence in Iceland reflects its proactive approach to addressing the potential impact of the proposed tax legislation on its operations.
bypassed the United States
Bit Digital, under the leadership of CEO Samir Tabar, has made a noteworthy $5 million investment to secure 2,500 Bitcoin miners, as previously reported. Wall Street Journal.
In a significant departure from its past practices, the company has chosen to deploy these newly acquired machines in Iceland, marking the first time in two years that Bit Digital has expanded its mining operations outside of the United States.
As part of this strategic move, about 20% of Bit Digital’s mining machines will be located in Canada, while the majority will continue to operate within the United States.
According to information in a Wall Street Journal report, Bit Digital claims that carbon-free energy sources power more than two-thirds of its mining operations. Specifically, the Iceland operation will rely heavily on hydroelectric and geothermal power, in line with the company’s focus on sustainable mining practices.
The company has scheduled the announcement of its move during the Bitcoin 2023 conference in Miami.
proactive response
The decision to establish a presence in Iceland comes after the Biden administration proposed a 30% tax on electricity expenses incurred by bitcoin mining operations. This view was reaffirmed in blog post Released last week.
The post supported the administration’s proposed cryptocurrency mining tax, which was initially introduced in the president’s budget.
The blog not only presents a misunderstanding of the crypto-mining sector, but also conveys the belief that the United States is unable to lead energy innovation and meet growing energy demand.
(embed) https://www.youtube.com/watch?v=48oYmyNDL54 (/embed)
The proposed tax, known as the Digital Assets Sale Tax (DAME), aims to charge an additional 30% for the power consumed by computers involved in mining cryptocurrency. According to White House estimates, this tax is expected to generate $3.5 billion in revenue over ten years.
It is uncertain if other companies will follow Bit Digital’s example, however, if they do, it is possible that governments or regulators could take note of tax policies in their region and make adjustments accordingly.