Kentucky State Senator Brandon Smith (R-Hazard) is dealing with increasing legal issues related to a Bitcoin mining repair company he co-founded in Letcher County named Mohawk Energy.
While Mohawk Energy was initially a company that participated in cleaning up coal mining sites, in 2022, it transitioned to providing repairs for Mississippi-style cryptocurrency mining equipment, according to reports.
Nonetheless, there are now two lawsuits that involve allegations of misrepresentation, breach of contract, and fraudulent conduct.
The first lawsuit was filed in January by a local entrepreneur, Ricky Dale Cole, who claims that Smith misrepresented an offer to purchase a warehouse from Cole below market value if Cole compensated Smith with a 20% interest in the company.
Cole claims he has been denied profit distributions, excluded from knowing financial details and profits from the company, and has continually been led on by Smith, falsely believing in Mohawk’s net worth and its overall expansion.
Contract Dispute with Huobi’s Subsidiary
In addition to Cole’s lawsuit, Smith and Mohawk Energy are involved in yet another lawsuit that has been brought by HBTPower, one of Huobi’s subsidiaries.
In the complaint that was filed in November of 2023, HBTPower claims that Smith breached the contract that was entered into in June of 2022, under which the Huobi entities would train Mohawk Energy employees in repairing ASIC mining machines.
The plan was for Mohawk to develop these capabilities internally, but tensions boiled over when HBTPower indicated its team was directed to leave the premises of Mohawk.
The company also states that Smith signed the contract before he even owned the warehouse, which raises a further question about the validity of the contract.
Also Read: IREN Faces Class Action Lawsuit Over Misrepresenting Crypto Mining Operations
Smith’s Response and Counterclaims
Senator Smith has refuted every claim and has also filed counterclaims against both plaintiffs. He notes that Mosler and HBTPower have not fulfilled their side of the deal, and that Mosler’s withdrawal from the partnership was the reason and not Mohawk’s actions.
Smith, speaking as the CEO of Mohawk Energy, emphasized that in spite of the current lawsuit, his company continues to work on creating jobs and job training opportunities in eastern Kentucky.
He added that the long-term mission of Mohawk will go forward and stated that the plaintiffs’ insinuated actions would distract from the progress made by Mohawk and its mission, which included false allegations.
Also Read: US Lawmakers To Examine Long-Awaited Digital Asset Tax Rules In October Hearing
Crypto Mining Industry Growth and Context
These arguments appear as the Bitcoin mining industry in the U.S. undergoes a period of rapid growth.
From 2022 to 2024, the number of mining operations in the U.S. increased by 23% to a total of 48 active mining sites.
Analysts such as Shanon Squires of Compass Mining observe that states like Texas and Wyoming are adding to a large portion of this growth as legacy companies are ramping up.
As the industry matures, change is still taking shape as some projects begin to fail as quickly as they launch.
Experts say firms must carefully select reliable partners, focusing on Mohawk’s experience as a pertinent story of untested partnerships.
Also Read: US Crypto Market Structure Bill Expected Before End Of 2025: White House Adviser
Broader Trend of Mining Lawsuits
Smith’s legal troubles are part of a larger cascade of litigation affecting the crypto mining business.
In February 2025, the U.S. Securities and Exchange Commission (SEC) suspended its fraud case against Geosyn Mining, diverging from the course of another crypto-mining company, when federal prosecutors unveiled criminal cases against executives in the company, according to UnoCrypto.
Also, we reported, in July 2025, that another Bitcoin miner, Mawson, cut ties with Rahul Mewawalla, its chief executive officer (CEO), after a probe was launched into investigative claims about his admission of fraud and breaches of fiduciary duty, which led to further litigation involving the company
These signs of legal disputes, accounting failures, and contract disputes are hardening means of scrutiny and accountability in an industry where these issues are becoming the norm.
Also Read: El Salvador Congress Greenlights Bitcoin Law to Make BTC Optional for Businesses