Winklevoss Capital sells its Zcash rigs to a company it backs and takes stock

Winklevoss Capital received a warrant for ~43.3 million shares of the company as part of Cypherpunk Technologies’ purchase of a new Zcash mining operation.

The structure dilutes existing shareholders and gives Gemini founders a bigger slice of the Zcash bet. Cypherpunk is trading on the Nasdaq as CYPH.

43,290,042 new shares dilute every CYPH holder

Cypherpunk paid the $33.33 million price by issuing Winklevoss Treasury Investments a pre-funded warrant for 43,290,042 common shares, exercisable at $0.001 per share. That equates to an implied stock price of $0.77 a share.

CYPH gained 15.85% in the August 18 session on volume about 4.2 times its daily average. About the same 15.4% jump the stock had after its May earnings report.

The operation, Cypherpunk Mining, is live and running Z15 Pro machines. They are generating ~4.2 GSol/s of Equihash hash rate, which the company estimates to be about 18% of the total Zcash network.

The fleet is distributed across US facilities, and Cypherpunk calls it the world’s largest Zcash mining operation. That is an addressable market of more than $250 million a year at current ZEC prices, compared to about 43,800 ZEC in monthly mining awards across the network.

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