BitRiver, a key player in the Russian cryptocurrency mining market, aims to raise up to $35 million by selling tokens that entitles holders to space in its data centers.
The company, which operates several mining farms in Siberia for 150 megawatts in total, would use the proceeds from the sale to open more such facilities. The token runs on the Ethereum blockchain, the main launchpad for fundraising tokens since the heady days of the 2017 initial coin offering (ICO) boom.
While ICOs have largely faded, BitRiver’s token offering, announced Monday, is one of several to hit the market this year tied to the mining sector.
In late March, Blockstream launched a token representing the value of hash power at Blockstream’s mining facility and offered buyers an indirect exposure to биткойн (BTC, +0.82%)
BitRiver, however, takes a different approach. Instead of indirect exposure to bitcoin, it offers clients a form of tokenized contracts for mining services, with a bonus income in tokens.
“It’s a utility token and it ideally fits our goal: to raise funds from people who will be using our future infrastructure,” BitRiver CEO Igor Runets told CoinDesk.
BitRiver, registered in Gibraltar but with a home base in Siberia, operates so-called mining hotels, or data centers for miners who place their ASICs there. Clients pay for the units of power their equipment uses to mine crypto, with the price including other expenses like machine maintenance.
The demand for BitRiver’s services has been significantly exceeding the company’s capacity, Runets said. In addition to the main data center in Bratsk, the company has several smaller venues that together comprise 50 more megawatts, but that’s still much less than prospective clients want, Runets said.
“We now see demand for 400 megawatts of power,” he said. “It’s a huge amount of construction work. We’re now looking to buy more land, buildings [and] start to build more data centers.”
Investments for that, as Runets expects, will come from the token sale. BitRiver is aiming to sell 100 million tokens for more than $35 million.
The demand for BitRiver’s services comes mostly from Asia, Runets said, especially from China, South Korea and Japan. BitRiver even opened an office in Seoul earlier in April to cater to that region, and the token sale will be on the Korean exchange Bithumb.
Growing demand has been also coming from Persian Gulf countries, namely Qatar, Saudi Arabia and UAE, Runets said: “Over the recent months, the market there has been growing, people have a lot of money to invest, and the surging price of bitcoin drew attention [to mining].”
Some of the expansion has been ongoing. BitRiver recently founded a joint venture with a Russian hydropower giant En+ to build a new mining venue of 10 megawatts. According to Runets, that farm is now operational.
Another venue, of 100 more megawatts, is currently under construction in the special economic zone of Buryatia, Russia’s East Siberian region on the border with Mongolia.