TLDR
- Kentucky Senator Brandon Smith is facing two lawsuits related to his Bitcoin mining business, Mohawk Energy.
- Ricky Dale Cole claims that Smith misrepresented the company’s value and failed to disclose financial information.
- Huobi subsidiary HBTPower accuses Smith of breach of contract and misrepresentation under a 2022 agreement.
- Smith denies the allegations and has filed counterclaims in both legal cases.
- Despite the lawsuits, Smith remains confident in the future of Bitcoin mining in Kentucky and Mohawk Energy’s growth.
Kentucky State Senator Brandon Smith faces two lawsuits concerning his Bitcoin mining business, Mohawk Energy. Smith, who is also the CEO of the company, co-founded it after pivoting from coal cleanup operations. His business has been embroiled in legal issues, with accusations of misrepresentation and breach of contract.
Lawsuit Over Alleged Misrepresentation
Ricky Dale Cole filed a lawsuit against Smith in January 2024, alleging that the senator had misrepresented the value of Mohawk Energy. Cole alleges he sold a warehouse to Mohawk under the promise of a 20% ownership stake in the company. However, Cole states that he has not received any profits, and the company has not shared financial details.
In his lawsuit, Cole claims Smith made false promises about the company’s future. He says Smith’s representations led to his decision to sell the warehouse below market value. Cole further argues that Smith’s actions have resulted in financial losses and a lack of transparency.
Smith has denied the allegations and filed counterclaims against Cole. The senator insists that the deal was fair and transparent. Despite the legal battle, he remains confident in the company’s future in Bitcoin mining.
Legal Battle With Huobi-Sponsored Company
Another lawsuit filed in November 2023 adds to Smith’s legal troubles. The lawsuit comes from HBTPower, a subsidiary of the Huobi Group. The company alleges breach of contract and misrepresentation by Smith and Mohawk Energy.
According to HBTPower, Smith made a deal in 2022 to train his workers in Bitcoin mining repair. However, after HBTPower employees helped Mohawk set up its operations, they were asked to leave. HBTPower claims Smith did not own the warehouse when the contract was signed, invalidating the agreement.
Smith has responded by filing counterclaims, denying HBTPower’s accusations. He argues that HBTPower’s allegations are unfounded and do not affect the long-term goals of Mohawk Energy. Despite the legal challenges, Smith remains optimistic about the future of Bitcoin mining in Kentucky.
Bitcoin Mining’s Growth in the U.S. and Kentucky
Bitcoin mining continues to expand in the United States, with a notable increase in mining sites over the past few years. Between 2022 and 2024, the number of Bitcoin mining sites in the U.S. rose by 23%. This expansion underscores the ongoing interest and investment in Bitcoin mining, particularly in states like Kentucky.
Kentucky has become a significant player in Bitcoin mining, thanks to the favorable tax incentives introduced by Smith. The 2021 bill, which Smith authored, provides tax breaks for Bitcoin mining operations. These incentives aim to attract more companies to Kentucky and help foster job growth in the state.
Despite the ongoing legal issues, Smith maintains that his company is dedicated to creating jobs in the region. He believes that Bitcoin mining will play a crucial role in Kentucky’s economic development. Smith hopes that once the lawsuits are resolved, Mohawk Energy can continue its mission to train workers and support the Bitcoin mining industry.
