Home News BitClub $722 Million Ponzi Fallout Extends to Montana: Receivership Sought for 32K...

BitClub $722 Million Ponzi Fallout Extends to Montana: Receivership Sought for 32K Rig Mining Farm

TL;DR: According to a local report, bitcoin mining farm CryptoWatt minority owner, Kevin Washington, is determined to gain receivership after its majority owner was indicted and then recently arrested by United States authorities for his alleged connection to the $722 million Ponzi scheme, BitClub. 

After BitClub Arrest, Minority Owner Wants CryptoWatt Receivership

Prior to the end of last year, Washington filed an emergency receivership request for CryptoWatt, a now dormant Bitcoin mining farm in Butte, Montana. It’s 32,000 rigs lay in limbo due to majority owner Matthew Brent Goettsche’s arrest just weeks ago along with two other men. Goettsche is alleged to have been the mastermind behind what authorities insist was an elaborate Ponzi scheme, BitClub, that bilked hundreds of millions from investors.

Goettsche faces charges of wire fraud and selling unregistered securities. FX Solutions, owned by Rick Tabish (pictured in featured image) also filed a lawsuit against Goettsche recently, claiming millions in damages as a result of CryptoWatt’s neglect due to the BitClub fallout. FX has been under contract with the mining farm to operate the facility and is looking at major financial losses due to vendors wishing to steer very clear of anything associated with BitClub or Goettsche.

According to local reporting, Tabish claims since the arrests Cryptowatt has shut down and all of its 32 employees were laid off, and “some $84,000 in checks from CryptoWatt to his company, FX Solutions, primarily for payroll for employees, have been returned for insufficient funds.” Adding insult to injury, the company’s “electrical power contract with Northwestern Energy is ‘in arrears,’ threatening the continued viability of the plant. If the power contract is not paid within a short time, it could imperil the plant’s ability to operate” going forward, local media claimed.

CryptoWatt in Butte is reportedly still worth about $68 million now, though more than $140 million has been sunk into it thus far. Two other mining farms in the state were also scheduled to come online via FX, but CryptoWatt’s financial troubles have placed them in doubt as well. Goettsche gained a controlling interest in the Butte operation back in mid 2018 when BitClub was still flying high, reportedly paying $1.5 million of a promised $5 million total to expand efforts through the likes of FX.

Kevin Washington’s emergency hearing request seeks to separate legally any perceived connection to CryptoWatt via BitClub, and there seems to have been none other than Goettsche entangling his own funds perhaps and failing to fulfill promises. However, since he does have a majority stake, Goettsche is the only one who can legally make the necessary changes to get the farm back up and running in an attempt to make investors and employees whole.

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