The private equity fund – called the Phoenix Fund – is set to sign the deal on Tuesday in Amsterdam.
The Phoenix Fund is understood to be backed by a small number of individuals, including Joe Lewis, the billionaire foreign exchange trader who teamed up with hedge fund manager George Soros to bet against sterling in 1992. The deal has been put together by Andrew Laurus, a former government bonds salesman at Lehman Brothers, who is also an investor in the fund.
Avalon was set up by Yifu Guo, a pioneer in the bitcoin mining industry. He was a member of the team that developed the first ASIC bitcoin mining hardware. Lewis and Guo could not be reached for comment.
As part of the deal, Avalon will gain access to TSMC microchips based on 20-nanometre processes, which are much faster than other chips. TSMC recently won a contract to supply chips to Apple. The increased processing power should give Avalon an edge in solving the algorithms that control the supply of bitcoins.
The Phoenix private equity fund looked at other bitcoin mining companies, including Butterfly Labs and KnCMiner but decided against investing, one of the people said. Avalon’s mining equipment will not be made available to the public.
http://www.efinancialnews.com/story/2013-08-05/bitcoin-gold-rush-heats-up-with-private-equity-deal