Ukrainian oligarch’s Kentucky steel plant switches to Bitcoin mining farm

A Kentucky steel plant has halted its metalworking but continues mining bitcoins inside the facility.

According to a Dec. 14 report by Ukrainian news outlet Radio Liberty, the CC Metals & Alloys (CCMA) plant, owned by Ukrainian oligarch Igor Kolomoisky and his business partners, has a data center where a third party mines cryptocurrencies. The article noted that the Tennessee Valley which hosts the plant is attracting multiple crypto mining operations thanks to its large amounts of cheap electricity.

The 70-year-old plant stopped operations in July and plans to lay off the remaining workers by the end of the year, as currently only the mining farm is active. One employee told the news outlet under the condition of anonymity that “whole trucks full of computers were brought” to the facility.

While the overall operations of the plant were first cut and halted, the mining operation continued unaffected—presumably due to its higher profitability. A CCMA spokesperson reportedly said in July that the firm invited a third party to host a data center for crypto mining and artificial intelligence applications to diversify its revenue stream:

“Both artificial intelligence and blockchain are energy-intensive industries and are expected to grow exponentially over the next decade and generate a $20 billion market. Based on the success of the first pilot, we can expand this line of business. CCMA considers it prudent to have multiple sources of income.”

Some CCMA workers speculate that the main reason for the owners’ reluctance to restart the plant may be pressure from the United States Department of Justice, the report said. In August, the Department of Justice filed a civil suit against Igor Kolomoisky and Gennady Bogolyubov. The two are accused of having withdrawn billions of dollars through fictitious loans from Privatbank, which they owned at that time—between 2008 and 2016.

Prosecutors believe that most of that money was invested in U.S. assets, including commercial real estate in Texas and Ohio, steel mills in Kentucky, West Virginia and Michigan, and a mobile phone factory in Illinois, it added.

If proven, the plant may be subject to seizure by law enforcement in the future. While any steel or other physical assets are seizable, any Bitcoin produced in the mining operation may prove much harder to get ahold of.