YEREVAN (CoinChapter.com) — Crypto Miner Hive Digital Technologies Ltd. has announced the expansion of its data center operations in Sweden. The company entered a property transfer agreement with Turis AB to acquire a data center in Boden.
NOTE: Founded in 2017, Hive Digital Technologies was the first crypto miner to be publicly listed, marking its debut on the Toronto Stock Exchange (TSX-V). The company recently rebranded from Hive Blockchain Technologies to Hive Digital Technologies and shifted its focus to AI, cloud computing, and GPU utilization.
Crypto Miner Hive Acquired Property in Sweden
According to the company, this new acquisition will enhance Hive’s Bitcoin (BTC) production capabilities and is strategically located near its existing data center in the region. The expansion aligns with Hive’s broader strategy of “embracing new technological domains,” such as artificial intelligence and cloud computing while maintaining its core involvement in crypto mining.
Johanna Thornblad, crypto miner Hive’s country president for Sweden, agreed.
The new data center will enable HIVE to grow its regional footprint while further demonstrating its commitment to its ESG focus, sustainable practices, environmental responsibility, and energy efficiency with its newest “green” energy-powered data center.
said Thornblad
Sweden’s Crypto Regulation Framework Favorable
The announcement comes when Sweden’s crypto regulation becomes increasingly clear and structured. The Swedish Tax Agency (Skatteverket) classifies cryptocurrencies as “other assets” for tax purposes, subjecting them to Capital Gains Tax, Income Tax, or Interest Income Tax based on the transaction’s nature.
The agency’s approach reflects a broader regulatory framework. In particular, the adoption of the European Union’s sixth Anti-Money Laundering Directive has enhanced the capability of the Swedish authorities to monitor cryptocurrency activities through stringent customer identification procedures (KYC).
Sweden’s stance on cryptocurrency taxation and regulation is part of a larger European movement towards standardized crypto-asset regulation. The upcoming Markets in Crypto Assets (MiCA) regulation by the EU, set to take effect in 2024, is one of the examples of the trend benefitting crypto mining companies, such as Hive.
MiCA aims to provide legal clarity for cryptocurrency-related businesses across member states, including Sweden, and is crucial for companies like Hive, whose operations span multiple countries and continents.
Meanwhile, crypto mining in Sweden faced significant challenges in 2023 despite a favorable regulatory framework.
Crypto Mining in Sweden Gets Tough
In 2023, while energy prices began normalizing, Sweden introduced a significant tax hike on electricity for data centers, including those used for crypto mining. The tax increased from SEK 0.006 ($0.0006) to SEK 0.36 ($0.035) per kilowatt-hour, potentially raising the all-in energy cost to $0.093/kWh.
This tax hike could make mining prohibitively expensive in Sweden, leading to reduced profitability and possibly the industry’s decline in the region. Crypto miner Hive previously disagreed with Swedish Tax Authorities over VAT recovery, indicating miners’ broader challenges.
To cope with the tax increase, some miners considered diversifying their operations to other regions or switching to self-mining instead of hosting others’ machines. There were also efforts to circumvent the tax by reusing the heat produced in data centers, thereby being taxed as heat producers instead of for crypto mining operations.
Moreover, as crypto miner Hive expanded operations to Sweden, the shift to AI technologies became more prominent. The CEO of Hive, Aydin Kilic, and Chairman Frank Holmes commented on the pivot toward AI. They asserted it doesn’t negate or lessen its involvement in Bitcoin and crypto mining. Instead, they commented that “blockchain and AI can certainly co-exist” and remain “pillars of Web3.”
