Cypherpunk Technologies secures 18% of ZEC mining power in a $33.3 million deal

Cypherpunk Technologies, a Canadian publicly traded company, has made a significant entry into the Zcash (ZEC) mining market. According to a public disclosure released on August 18th, the company acquired 4,902 mining rigs from Moria Mining, a company affiliated with Winklevoss Treasury Investments (WTI), for $33.3 million. These rigs will provide a hash rate of 4.2 GSol/s across three sites in the United States, making Cypherpunk the world's largest ZEC mining operator, holding approximately 18% of the entire ZEC network's mining power. The acquisition price was paid not in cash, but through pre-funded warrants. WTI received warrants that allow it to acquire up to 43.29 million shares, with a strike price of $0.001 per share. At the time of the transaction, the value of Cipherpunk's shares was estimated at $0.77 per share. If all the warrants are exercised on the existing approximately 100.78 million shares, the total number of shares issued would increase to approximately 151.1 million, and the warrant shares would represent approximately 28.7% of the expanded total shares. However, according to the agreement, initially only 5.37 million shares can be issued, and the remaining shares will require approval from a future shareholder meeting. In terms of its ownership structure, WTI already holds significant influence. WTI has exercised its right to nominate directors, appointing William McEvoy and King O'A as board members. Furthermore, the acquisition of the mining equipment was approved by the Cyberpunk Governance Committee as a related-party transaction. Additionally, the terms of the warrants restrict WTI from exercising them if its actual holdings exceed 19.99%, which, combined with WTI's existing 19.9% stake, creates a complex governance structure. The core of the mining strategy is to increase the company's holdings of Zcash (ZEC). As of August 11th, Cypherpunk holds 323,394.38 ZEC, which represents approximately 2% of the circulating supply of ZEC. The goal is to reach 5%. Since approximately 1,440 ZEC are paid to miners each day, the plan is to acquire ZEC at a lower cost than the current market price through in-house mining. The company intends to use the mining revenue to purchase additional ZEC, invest in growth, and develop privacy technologies. Kevin Zhang has been appointed as the new Head of Mining. Zhang has a proven track record of building major mining operations in North America, previously working in the foundry industry. He has stated that ZEC mining is currently more profitable than Bitcoin mining and AI colocation. The Winklevoss twins also announced this in an official statement