Hive Blockchain Technologies has sold its Norwegian subsidiary Kolos Norway to the local municipality of Narvik.

The company previously bought Kolos for almost $10 million, but now has offloaded the business, paying Narvik $200,000 to take all of the shares.

Should have put it on the blockchain

Kolos colocation campus that will never become a reality
The original Kolos proposal – Kolos Norway

Kolos was launched in the middle of 2017 with aggressive plans to build a huge data center in Ballangen, Nordland. The company claimed it would build a 600,000 sq m (6.46m sq ft) colocation facility offering up to 1,000MW of IT capacity.

But project details were light, and it was never clear just how real the proposal was. After pledging to raise $250m, the company raised just $2.5m in 2017, with a promise to break ground the next year.

But in 2018, the campus was instead sold off to Hive for $9.9m. The site was then set to be repurposed for cryptocurrency mining, with Hive and partner Genesis Mining promising to develop a 30MW data center, growing to 120MW in a year.

“Kolos will be a flagship data center project for Hive for years to come and has the potential to expand to more than 1GW, or 1,000MW, of green hydroelectricity consumption dedicated to blockchain infrastructure,” Harry Pokrandt, CEO and director of Hive, said at the time.

The plan almost immediately collapsed. In December 2018, the Norwegian Parliament approved a legislative bill that cryptocurrency miners were no longer subject to the relief on power consumption at the same rate as other power-intensive industries.

This made cryptocurrency mining unsustainable, the company said. It also claimed unspecified "uncertainty around the development of this greenfield project." In March 2019, the company wrote down the land development rights from $15m to $0. It also had to extinguish $3.1m in loans associated with the failed project.

"We are unfortunate that it has come to this, but glad that the property has been retained by the local community so that the community can focus on developing this greenfield property for many uses," executive chairman Frank Holmes said.

"This deal was made before myself or our CFO had assumed executive duties. We are pleased that our management team can now continue to focus on more immediate needs like upgrading our current facilities while expanding existing operations in Sweden, Iceland, and Canada."

The company currently has crypto assets of around $109 million (based on US $3,900 Ethereum and US $59,000 Bitcoin) and $33m in traditional dollars.

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