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Billionaire Turns to Bitcoin Mining To Help His Troubled Business

Tim Alper
Last updated: | 2 min read

The Ukrainian oligarch and former Dnipropetrovsk Oblast governor Ihor Kolomoisky had reportedly launched a crypto mining operation at a troubled steel processing factory in the United States – and he may only just be getting started.

Ihor Kolomoisky. Source: A video screenshot, Youtube, Українська правда

Per Radio Liberty, “current and ex-employees” of the plant, CC Metals & Alloys (CCMA), located in Kentucky, has switched off its furnaces – once used to produce alloys such as ferrosilicon.

But the report’s authors and its anonymous sources claim that the plant’s owners “have begun with a new way of earning money to cover their losses in the steel alloy market: namely, crypto.”

The sources added that “a few years ago,” Kolomoisky and his fellow Ukrainian, Miami-based partners Mordechai Korf and Uriel Laber ordered a disused warehouse once used to store specialized alloys to be repurposed and “filled with hundreds, if not thousands” of rigs used to mine cryptoassets.

If the report is indeed true, the CCMA crypto mining is no anomaly. A growing number of crypto miners have set up shop in the Tennessee River Valley area in recent years, hoping to take advantage of the region’s notoriously low electricity prices.

A current employee claimed that “entire truckloads” of computer hardware were brought to the CCMA warehouse, which the employee claims “works independently of the plant itself, and it has not been affected by job cuts.

And the same media outlet claims that a spokesperson for Korf and Laber told it back in July that the plant had asked a “third party” to set up a “computer center” at the plant that would use “artificial intelligence and blockchain technology” to help “diversify” profits – but did not specify how much the Ukrainian businessmen had spent on the project, or who they had contracted to carry out the work.

The Korf and Laber spokesperson indicated that more crypto mining projects were already in the pipeline, adding,

“Both artificial intelligence and blockchain technology are high-energy industries and are expected to grow exponentially over the next decade, reaching a market value of USD 20 billion. Based on the success of the first pilot program, we will be able to expand this line of business. Having many sources of income is a prudent move for CCMA.”

Crypto mining has become increasingly popular for those wishing to make use of shuttered facilities in former industrial powerhouse states now going through harder times. In 2018, Politico reported that miners in Washington were setting up shop in former fruit warehouses and abandoned carwashes.

Site Selection reported, also in 2018, that bitcoin (BTC) miners were looking to Montana, meanwhile.

And Fortune recently explained that a public utility in Chelan County, Washington, has had to deal with “a crush of mining companies asking to tap into the county’s ample hydroelectric resources.”

Kolomoisky – one of the country’s richest people – is the co-founder of PrivatBank, one of Ukraine’s largest banks, although he has recenetly faced controversy regarding his financial dealings with the financial entity. He also has close business ties with Ukrainian football club Dnipro.
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