Hut 8 Mining, a Canadian bitcoin mining company, has just announced that it has secured a loan of up to $50 million from Coinbase Credit. This will provide the funding needed to complete its merger with U.S. Bitcoin Corp (USBTC).
Coinbase, a major cryptocurrency exchange, has been moving towards institutional markets, including plans to be the custodian for BlackRock’s highly-publicized bitcoin exchange-traded fund, pending regulatory approval. In March, the exchange acquired institutional digital asset manager One River.
Hut 8’s new credit facility comprises a $15 million term loan which is expected to be funded shortly, an option to draw an additional $20 million between one and two months later, and another $15 million within 15 business days after completing the merger with USBTC.
Hut 8 shares remain stable despite the announcement. This announcement comes as the U.S. Securities and Exchange Commission accuses Coinbase of operating an unregistered securities exchange in one of two recently-filed blockbuster lawsuits, the other being against Binance.
Coinbase Credit, which provided the loan, is one of Coinbase’s subsidiaries. It is labeled as a “finance subsidiary” in a previous filing. Hut 8 has been struggling in recent times, with its first-quarter revenue dropping by 64%. The loan from Coinbase Credit will help the company regain its financial footing in the competitive cryptocurrency landscape.