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Bitcoin miner goes carbon negative to shed industry’s ‘greedy villain’ image as it goes public

Bitcoin miner goes carbon negative to shed industry’s ‘greedy villain’ image as it goes public
People & Culture
Rob Chang, CEO of Gryphon Digital Mining, is committed to mining Bitcoin entirely with renewable energy. Credit: Rita Fortunato/DL News
  • Gryphon Digital Mining CEO Rob Chang tells DL News his firm is going green to secure more financing and bolster its value.
  • Complying with ESG criteria is tough because there’s no industry standard.
  • The mining industry has long been ‘the villain’ for excessive carbon emissions.

The Moses-Saunders Power Dam, located between Canada and New York state, regulates the level of a river that flows from the Great Lakes to the Atlantic.

The 65-year old structure also supports two hydroelectric power stations and a steady source of cheap, guilt-free energy.

No wonder Bitcoin miners fell in love with it.

“The facility that we use is a stone’s throw away from the dam,” Rob Chang, the CEO of Gryphon Digital Mining, told DL News.

“On top of that, we purchased carbon offset credits a couple of years ago,” he said. “We don’t need [the credits] for our base level operations, because our miners used hydro-power so it’s zero emissions.”

‘We were easy to target — the greedy Bitcoin miners that are destroying the world by using coal power for their machines.’

—  Rob Chang

Gryphon says it is a carbon negative Bitcoin mining company, which means it removes more carbon from the atmosphere than it emits.

It’s at the forefront of a push to make Bitcoin mining compliant with ESG, an investment approach that stands for environmental, social, and governance criteria. ESG observant companies tend to attract more investors, greater value, and better financing.

A 2022 study by Deloitte found that companies that improve their ESG performance can bolster a key pre-tax earnings measure by 1.8 times.

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Wall Street firms also subscribe to the ESG approach and offer dozens of funds with ESG branding. A Bitcoin mining outfit with solid ESG credentials might draw a lot of favour with those types of money managers, especially in a bull market.

Investment giants BlackRock and Fidelity are eager to launch their own Bitcoin exchange-traded funds and make the digital asset a more mainstream offering.

Moreover, Gryphon is poised to go public as part of a merger with Akerna, a Nasdaq-listed cannabis software firm based in Denver.

The so-called reverse merger means Gryphon gets access to Akerna’s Nasdaq listing, helping the fledgling firm attract capital from US investors.

Climate-wrecking truants

But there’s another reason behind the green push: Bitcoin miners are sick and tired of being portrayed as climate-wrecking truants.

“It’s always nice to rally around some type of villain,” Chang said. “We were easy to target — the greedy Bitcoin miners that are destroying the world by using coal power for their machines.”

US Bitcoin miners caused as much carbon pollution as 3.5 million gasoline-powered cars, The New York Times reported in April.

Meanwhile, a United Nations think tank found in October that a forest the size of Denmark would need to be planted to offset Bitcoin mining’s carbon emissions from January 2020 to December 2021.

Bitcoin miners “likely fear being — rightfully — called out for consuming more electricity than the entire traditional financial system combined while not even returning the smallest fraction of the same level of utility,” Alex de Vries, a data scientist and financial economic crime expert at De Nederlandsche Bank in Amsterdam, told DL News.

Making Bitcoin mining carbon free won’t be easy, and neither will complying with the complicated requirements of ESG.

Companies and investment firms have struggled for the last decade to produce useful ways to measure ESG compliance. Unlike finance, where Generally Accepted Accounting Principles, or GAAP, put everyone on the same page, ESG investing has no industry standard.

Rare glimpse

Yet Bitcoin miners such as Gryphon are turning to independent organisations and global consulting firms to audit and certify their ESG efforts.

The idea is to assure investors, and regulators, that they are indeed curbing greenhouse gas emissions.

How Gryphon fares offers a rare glimpse into an issue that is bound to become more important as Bitcoin rebounds and more investors jump into the crypto market.

Founded in 2020 by Chang and Dan Tolhurst, Gryphon quickly assembled a seasoned team of executives from some of the biggest Bitcoin mining operations in the US.

The company’s chief financial officer, Sim Salzman, previously had the same role at Marathon Digital Holdings, a listed mining firm with a $5.8 billion market capitalisation.

Chris Ensey, Gryphon’s chief technical advisor, is the former CEO of Riot Platforms, another industry leader.

And Chang used to serve as CFO at Riot and as managing director at Cantor Fitzgerald, the 79-year-old trading and financial services firm.

From the outset, Gryphon was designed to have a zero carbon footprint.

In a filing with the US Securities and Exchange Commission in 2021, Gryphon said it wouldn’t even “contemplate” mining Bitcoin using energy that isn’t 100% renewable.

“Gryphon’s mission is to create the world’s largest fully integrated pure play Bitcoin miner with a zero carbon footprint,” it told the SEC.

Unlike older players such as Marathon and Riot, Gryphon is still a small outfit. It executes 1.2 so-called exahash per second of computing power — about 20 times less than Marathon.

The more hashes an operation can perform, the more chances it has to create a block and get rewarded with Bitcoins. One exahash equals one quintillion hashes per second.

Reverse takeover

Gryphon is bent on joining the big leagues. It told the SEC that it plans to become “one of the largest renewable energy powered data centres in the world.”

A key stepping stone is going public through its reverse takeover of Akerna, a publicly-traded cannabis company. Chang hopes the deal will close early this year.

The linchpin of his strategy was carbon-free power, and with its constant flow of water and hydro-electric plants, Moses-Saunders was the right fit.

In 2021, Gryphon secured a deal for the electricity. It also started purchasing carbon credits, which permit holders to emit greenhouse gases without counting the emissions as part of their footprint.

The company applies those credits to offset emissions from supply deliveries or travel to conferences.

Marathon’s view

Gryphon isn’t the only Bitcoin mining company interested in going green. Marathon claims to be 100% carbon neutral, with 58% of its energy drawn from sustainable sources.

“Marathon has become a strategic collaborator in optimising energy utilisation — both in the categories of renewable, green energy as well as in waste energy,” Marathon Chief Growth Officer Adam Swick told DL News.

Other public miners have comparable figures. Cleanspark claimed to be using 94% clean energy across four mining sites in its 2023 ESG report. The firm is also participating in renewable energy programs like Georgia Simple Solar to make up the difference.

Bitdeer, meanwhile, told DL News that three of its mining data centres — two in Norway, one in the state of Washington — were 100% carbon free, while its data centres in Tennessee and Texas were 60% and 46% carbon free, respectively.

These numbers are self-reported, Bitdeer told DL News, meaning they weren’t verified by a third party.

That’s a common problem in the industry, Chang said.

No industry standard

Because the industry is so new — and the emphasis on using renewable energy so recent — there is no set standard to measure a Bitcoin miner’s carbon emissions or renewable energy usage.

Some public companies, like CleanSpark or Hut 8, issue their own ESG reports. Others, like Marathon, collect the data internally and provide it upon request.

Canadian mining company Hut 8 told DL News that its own ESG figures had received third party assurance from global accounting firm EY.

Erin Dermer, Hut 8′s senior vice president of communications and culture, said that almost 72% of the firm’s high performance computing relied on renewable energy but only 4.6% of its mining operations did the same.

However, 40% of Hut 8′s total emissions were offset through renewable energy certificates and carbon credits in 2022.

EY noted in the firm’s ESG report that the absence of an established practice for Bitcoin mining carbon emissions estimates opened the possibility for different evaluations techniques, each with their distinct results.

Green Proofs for Bitcoin

Chang pointed to Green Proofs for Bitcoin, an initiative led by non-profit organisation Energy Web that issues ESG certificates to miners.

Launched in May, the non-profit looks at two metrics when evaluating miners’ sustainability efforts: how much a mining operation relies on renewable energy, and how much the miner contributes to grid stability through demand programs.

According to the website, five Bitcoin mining companies, including Gryphon, Argo Blockchain, and DMG Blockchain Solutions, received certificates for their 2021 and 2022 emissions.

Only the certificates for DMG were published with energy use data. Green Proofs for Bitcoin awarded the company a 96% clean energy score.

When asked whether the certificate had helped attract more investors, Chang said Gryphon hadn’t needed to raise capital since late 2021 — long before the firm had received the Green Proofs certificate.

“It may take a while to derive direct economic benefits as these types of certifications are new, and there still is a lot of work to do so that green miners are economically compensated for contributing to global decarbonisation efforts,” DMG Chief Operating Officer Steven Eliscu told DL News.

For all of Gryphon’s efforts, it remains to be seen whether Chang and his team can scale up without relying on fossil fuels or losing efficiency.

While the Moses-Saunders facility still has room to grow, Chang is keeping an eye out for other power sources in the US, Iceland, or Greenland.

His two criteria: safe jurisdictions with proper rule of law, and consistent clean energy.

“We could go for the standard mix — solar, wind, geothermal. Hydro is usually the best,” said Chang. “But I’d be happy to find a nuclear facility because that’s going to be just as good as hydro.”

Tom Carreras is a markets correspondent at DL News. Got a tip about sustainability and Bitcoin mining? Reach out at

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