BUTTE — A minority owner and the operator of a cryptocurrency server farm in Butte are working to keep the operation open after the majority owner was indicted in a $722 million Ponzi scheme.
Kevin Washington and Rick Tabish filed lawsuits in District Court in Butte last week seeking millions of dollars in damages from Matthew Brent Goettsche, the majority owner of CryptoWatt, The Montana Standard reported.
They also plan to ask the court this week to set up a receivership for CryptoWatt so it could resume operations.
Kevin Washington, son of billionaire industrialist Dennis Washington, said he invested “tens of millions” in the operation under a former owner.
“I have a very credible business person poised to step in and write a check,” if needed, Washington told the Standard. “I just want to get it into responsible hands so it can be operated properly.”
CryptoWatt’s electrical power transmission contract with NorthWestern Energy is in arrears, threatening the continued viability of the plant, Washington said. Maintaining that contract is key to the operation.
“If we can’t get that power contract taken care of in three weeks, the value of the facility will drop greatly,” said Milt Datsopoulos, a Missoula attorney who has advised the Washington family for many years.
Officials with NorthWestern Energy say they’re monitoring the situation.
Goettsche, 37, is charged with conspiracy to engage in wire fraud in connection with his role in BitClub Network. The network solicited money from investors in exchange for purported shares of cryptocurrency mining pools, prosecutors said. Four other people also face charges. Prosecutors allege they were repaying earlier investors with money from new investors.
Goettsche, of Lafayette, Colorado, remains detained without bail and an arraignment date has not been set, prosecutors said. Federal court records do not indicate if he has an attorney who could speak on his behalf.
There was no connection between BitClub and CryptoWatt, officials have said.
However, with Goettsche in custody, his “inability to conduct financial transaction(s)” has caused all Crypto Watt operations to cease, resulting in all 32 of CryptoWatt’s Butte employees to be laid off,” said Tabish, owner of FX Solutions, which operates CryptoWatt.
Bitcoin mining requires significant power usage to run specialized servers that process and record transactions in exchange for virtual currency. A Bitcoin was worth about $7,200 on Monday. Its value peaked at $19,783 in late 2017.