Legal Disputes Involving Senator Brandon Smith
Senator Brandon Smith, a Republican representing Hazard, Kentucky, is currently embroiled in two legal disputes stemming from his role as the CEO and co-founder of Mohawk Energy, a Letcher County-based company that transitioned from coal cleanup to Bitcoin mining repair operations in 2022.
Details of the Lawsuits
One lawsuit, filed by Ricky Dale Cole in January in Letcher Circuit Court, alleges that Smith misrepresented the value of Mohawk Energy during negotiations over the sale of a warehouse. Cole contends that he sold the property to Mohawk at a below-market price in exchange for a 20% equity share but has not received any financial feedback or profits from the venture. He claims that Smith made false representations regarding the business’s prospects.
In addition to Cole’s suit, a second case has been brought against Smith by HBTPower, a subsidiary of the cryptocurrency exchange Huobi, initiated in November 2023. HBTPower accuses Mohawk Energy of breaching contractual agreements made in June 2022, which involved collaborations for training Smith’s team on the repair of Bitcoin mining equipment. According to HBT’s allegations, Smith misled them about his ownership of the warehouse when the agreement was made, and later asked HBTPower staff to vacate Mohawk’s site.
Smith’s Outlook on Cryptocurrency
Despite these ongoing legal challenges, Smith is maintaining a positive outlook on the cryptocurrency sector, not only in the United States but particularly in Kentucky. He has played a significant role in advancing legislation related to crypto; notably, he authored a 2021 bill that introduced tax incentives for cryptocurrency mining operations in the state.
In a statement to Decrypt as the head of Mohawk Energy, Smith expressed enthusiasm for the company’s future goals of fostering job creation and technological training once the legal matters are settled. He pointed out that the contractual disagreements with Huobi and HBTPower do not deter Mohawk’s long-term plans. “While it is unfortunate that Huobi and its shell subsidiary HBTPower breached their eight-year contract and refused to start operating at the Mohawk plant, that does not impact Mohawk’s long-term plans to bring more jobs and technology training to the region,” Smith stated.
Growth in the Cryptocurrency Mining Landscape
The backdrop of these legal issues coincides with rapid growth in the U.S. cryptocurrency mining landscape, where the number of Bitcoin mining sites surged by 23% from 2022 to 2024, reaching 48 in total. Shanon Squires, Chief Mining Officer at Compass Mining, noted that this trend is particularly pronounced in states like Texas and Wyoming, emphasizing that most of this growth is driven by established companies rather than new entrants.
She remarked that while the American cryptomining industry has matured and is less chaotic than in the past, it remains essential for companies to collaborate with reputable partners to navigate the evolving market effectively.
