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Norwegian subsidy elimination deterrent to crypto industry: HIVE Blockchain Technologies (OTC:HVBTF)

Tony Zerucha

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A recent decision by the Norwegian government will impede the success of cryptocurrency miners operating in the country, HIVE Blockchain Technologies (OTC:HVBTF) believes.

In early December of 2018 Norway’s Parliament approved a bill that eliminated the tax relief cryptocurrency miners had previously received. The subsidy remains for other power-intensive industries. The change is expected to take place in March of 2019 and has been factored into the national budget.

The changes were enacted without any consultation with affected companies, Hive’s interim executive chairman said.

“I am extremely disappointed by the proposed changes to the regulatory framework in Norway.” Frank Holmes said. “In my view, unilateral decisions by governments without industry consultation and discussion represent a significant risk to stability and long-term investment decisions.

“My experience as a global chief investment officer is that regulatory uncertainty is a significant barrier to attracting long-term foreign capital and governments that unexpectedly move the goal posts create an unfavorable investment environment. These abrupt regulatory changes have forced us to reassess the value of our asset in Norway which, prior to the proposed change, represented an attractive green-field opportunity to develop data centres to serve the global technology community as well as the potential to erect cryptocurrency mining infrastructure given the access to more than 1,000 megawatts of power on the property.”

Norway’s decision forced Hive to propose changes to its loan agreement with debt holders on its Kolos Norway acquisition. In a letter dated Dec. 20 Hive proposed a one-year extension of a $2.4 million convertible loan so they can assess the impact of the government’s decision.

“The company is committed to working with debt holders to reach an agreement that is in the best interests of all HIVE stakeholders,” Hive said in a statement. “The company intends to complete its assessment of the damages inflicted by the policy change upon the value of assets prior to the close of the fiscal year end on Mar. 31, 2019.

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Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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