Another bitcoin mining farm coming in the US, this time backed by Winklevoss Capital and Polychain

Quick Take

  • Denver-based company Crusoe Energy Systems is set to open a bitcoin mining facility
  • The company has raised $70 million in two rounds to fund its projects
  • One round saw participation from Winklevoss Capital and Polychain Capital, among other notable investors

Crusoe Energy Systems, a Denver-based company that converts natural gas to energy-intensive computing, is set to build a new bitcoin mining facility.

The company will install 70 units next year, each with a capacity of about 1 megawatt (MW), Chase Lochmiller, CEO of Crusoe, told Bloomberg in an interview published Saturday. Crusoe has also raised $70 million in fresh capital to fund its projects.

Announced Friday, the new capital comes from two rounds - $30 million in equity funding and $40 million in project financing. The equity round was led by existing investor Bain Capital Ventures and new investor The KCK Group, with participation from Peter Thiel's Founders Fund, Winklevoss Capital and Polychain Capital. The $40 million round was led by New York-based credit fund Upper90.

Winklevoss Capital also participated in Crusoe's $4.5 million seed round in May, which was led by Bain Capital Ventures.

Gas flaring

Through its projects, including bitcoin mining facility, Crusoe aims to solve the growing problem of gas flaring, where energy companies burn off excess gas in the absence of adequate pipeline capacity. Citing data from the World Bank's Global Gas Flaring Reduction Partnership, Crusoe said nearly 497 billion cubic feet of natural gas are flared annually in the U.S., which is enough gas to power over 10 million homes.

With its bitcoin mining farm, for instance, Crusoe plans to utilize about 10 million cubic feet a day of gas which otherwise would have got wasted, Lochmiller told Bloomberg. “It’s a very creative way to solve an environmental and economic problem for the oil and gas industry,” Alex Urdea, the chief investment officer of Upper90, was quoted as saying in the report.


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Crusoe plans to deploy up to 40 Digital Flare Mitigation (DFM) systems through the first half of 2020, per the announcement. The company currently has flare mitigation projects operating in three oilfields - Wyoming's Powder River Basin, Colorado's Denver-Julesburg, and North Dakota and Montana's Bakken. Crusoe said its DFM systems are scalable up to millions of cubic feet per day and can be deployed anywhere in the U.S. or Canada.

Is the U.S. becoming a new China?

The U.S. appears to be becoming another China for cryptocurrency mining. Just last month, two firms - Whinstone US Inc. and Northern Bitcoin AG, merged to open a 100-acre bitcoin mining farm in the Texas state. Chinese mining giant Bitmain also recently launched a 50-megawatt farm, also in Texas, calling it “the world’s largest for bitcoin mining.” Digital Currency Group-backed firm Layer1 also recently raised $50 million to build mining chips and to run its own electricity substations in Texas.

The Block recently reported that one advantage of bitcoin mining in Texas is its abundant power resources and cheap electricity prices. But that’s not the main reason bitcoin miners are flocking to the state. Rather, regulatory stability is the key driver, several industry participants told The Block at the time. “In China, mining is a dirty business,” said Leo Zhang, research lead at Iterative Capital, referring to the fact that bitcoin miners in China usually need to have a deep understanding of the local political and social culture, and possess a substantial social network to set up their mining business.

Yet, around 70% of the crypto mining market is currently dominated by Chinese miners and the top 5 known mining pools are also all based in China.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.