Galaxy Digital has provided a $20 million Bitcoin-backed loan to Argo Blockchain, a crypto mining business based in the United Kingdom, for the construction of a data centre in West Texas.
The announcement comes as the Financial Conduct Authority of the United Kingdom cracks down on cryptocurrency exchanges.
Argo released a Statement saying that it has acquired £14 million — around $19.4 million at the time of publication — from Galaxy Digital in a six-month loan deal using a portion of its BTC assets as security.
According to the company, the proceeds of the loans and cash generated in prior investment rounds will be used to expand Argo’s mining activities in Texas and cover existing operational expenditures.
“This agreement allows Argo to secure competitive terms on a loan facility while also allowing us to continue to HODL our Bitcoin,” said Argo CEO Peter Wall.
Since this loan is partly backed by Bitcoin, Argo could gain by HODLing its cryptocurrency and waiting for the price to rise until the loan is due in December.
Wall informed Cointelegraph in March that Argo pays him solely in BTC, and the corporation reported holding 1108 BTC — more over $40 million — as of the end of May, having mined 716 coins in 2021.
Argo, based in the United Kingdom, has been planning a data center in West Texas for quite some time. The company revealed in March that it had secured a 320-acre plot of land on which it planned to build a 200-megawatt crypto mining operation.
Part of the motivation for the shift, according to Wall, was the state’s low-cost renewable energy and openness to new technology innovation.
Argo’s announcement comes as the Financial Conduct Authority, or FCA, in the United Kingdom appears to be imposing harsher rules on crypto businesses. Following an examination of its operations, the regulatory agency ordered Binance to cease all regulated activities in the United Kingdom.
At least 64 crypto and blockchain companies that had previously filed registration applications with the FCA have withdrawn their applications this month.