A U.S. judge has appointed a receiver to oversee a Bitcoin plant in Montana after the majority owner was indicted on federal charges alleging he was running a Ponzi scheme involving cryptocurrency investments.
U.S. District Judge Brian Morris on Friday appointed retired U.S. Magistrate Judge Jeremiah Lynch as the receiver for CryptoWatt in Butte, The Montana Standard reported. Lynch will oversee the company's finances and assets.
Minority owner Kevin Washington and operator Rick Tabish requested the court appoint a receiver. They argued the owner, Matthew Goettsche of Lafayette, Colorado, wasn't paying the bills, which threatened the entire operation, including 32 jobs.
CryptoWatt is behind in paying its power bill to NorthWestern Energy, threatening the viability of the plant, Washington said. Maintaining that transmission contract is key to the operation.
Bitcoin mining requires significant power usage to run specialized computers that process and record transactions in exchange for virtual currency. A Bitcoin was worth $8,748 on Tuesday. Its value peaked at $19,783 in late 2017.
Morris' order directs Lynch to enter into a loan agreement between CryptoWatt and Washington to provide funding for at least three months, to secure all Bitcoin mined by CryptoWatt and negotiate any contracts necessary to keep operating the plant.
The order allows Lynch to collect $22,500 a month for his services.
Goettsche, 37, is charged in New Jersey 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. He was arrested in Colorado.
Four attorneys listed for Goettsche in court records did not immediately return an email from The Associated Press seeking comment Tuesday.