No top-tier bank willing to give Bitmain/Allrise letter of credit-- reflects high level of risk to PUD citizen owners

Yesterday (June 28) the PUD Commissioners held a special meeting to determine how to deal with the increasing financial risk Beijing Bitmain's and Allrise Capital's distressed crypto project is posing to our citizen owned PUD. The biggest takeaway from the meeting, of which the public portion lasted only a few minutes, is that PUD does not believe that any financial institution with a qualifying credit rating is willing to provide a letter of credit to Bitmain/Allrise. 

​Bitmain/Allrise are currently in breach of their contract with our PUD, which requires that the high-risk crypto company maintains a $16 million letter of credit from a qualifying financial institution. After Bitmain/Allrise's Silicon Valley Bank collapsed earlier this year and US Bank's credit rating was downgraded, Bitmain/Allrise former letter of credit no longer met their contractual obligations. 

Over the last two and a half months, Bitmain/Allrise have not been able to find a qualifying financial institution that is willing to provide them with a letter of credit. This appears to be an indicator that banks consider Bitmain/Allrise too much of a risk. This does not reflect well on the state of Bitmain/Allrise's current financial condition and its financial prospects. 

We have previously reported that Bitmain/Allrise's massive bitcoin mining facility in Usk has been a financial disaster for the two companies. See Harbinger of Insolvency: High prices for market power futures may hasten Bitmain/Allrise bankruptcy - PROTECT PEND OREILLE

And POC Cryptonomics - PROTECT PEND OREILLE

After providing multiple extensions to allow Bitmain/Allrise to correct their breach in contract, it now appears like our PUD is finally tiring of their noncompliance. The PUD will be proposing an alternative modification of the contract to manage the enormous financial risks the crypto firm is currently posing to our PUD's other 9,600 ratepayers who will have to pick up the millions of dollars in losses should Bitmain/Allrise default on the money they owe the PUD and enter to bankruptcy. 

The details of the new proposed provisions for managing the financial risk were not disclosed in public session, but hopefully the PUD Commissioners will continue their previous practice of putting the residents of Pend Oreille County ahead of Beijing's.