A New Hampshire executive council blocked a plan by a conduit issuer to sell municipal bonds backed by bitcoin.
The deal, which would have been the first of its kind, had been in the works for a year. Despite procuring a rating and support from the governor, an executive council determined New Hampshire did not benefit from issuing the bonds.
"This is facilitating a private loan, essentially," Councilor Karen Liot Hill said during the hearing. "We are being asked as a state to lend a kind of legitimacy to a financial transaction which is an emerging asset class that's been shown to be very volatile."
The New Hampshire Business Finance Authority sought to issue the $100 million deal on behalf of a bitcoin mining company. The team behind the transaction
The executive council vetoed the proposal by a 3-2 vote.
In a statement to Bloomberg News, BFA Executive Director James Key Wallace said he is "committed to bringing forward any information the executive council may need and would be happy to re-present the item for approval."
Key-Wallace had described the deal as innovative, arguing it could have promoted New Hampshire as being friendly to the cryptocurrency industry. Four other states reached out to inquire about similar deals, he said.
"Is there any harm in letting another state take the lead on this?" Councilor Janet Stevens asked Key-Wallace, to which he responded: "The harm is that they get all the benefit for all of our hard work."
The structure of the proposed deal would have allowed investors to get a higher return if the value of bitcoin increased, but carry none of the downside risk. If the price of bitcoin had dropped below a certain threshold, all of the bonds would have been liquidated and the par amount returned to investors.
Bitcoin mining and data center company CleanSpark was going to be the borrower, with BitGo as custodian and Wave Digital Assets as the administrator. Jefferies signed on as underwriter and Orrick advised BFA on the structure of the transaction.
BFA's fee would have been 12.5% of the increase in the $100 million fund of bitcoin, according to Key-Wallace's testimony.
The transaction was unanimously approved by BFA's board in November. It received a Ba2
Councilors expressed confusion about the transaction and reservations about its unique, complex structure. The BFA exists to finance businesses within New Hampshire and its transactions are supposed to provide a direct benefit for the state.
"I'm having a hard time wrapping my head around how highly speculative this is," Councilor David H. Wheeler said. "This isn't the normal BFA-type thing where you've got financing for bricks and mortar or bonding for bricks and mortar, and I'm trying to decide whether that should be the role of the BFA."
"Anytime you are the first person doing something, you might be getting it right, but you also might not," Liot Hill said. "This is $100 million. This is the legitimacy of the state of New Hampshire, and it may well be that all of your projections for the future are accurate, and there's nothing to be worried about here, but it also may be that there is something to be worried about here."
Liot Hill made a motion to table the deal before the vote, saying she didn't have enough time to understand the transaction, but no one seconded her motion.
Gov. Kelly Ayotte has supported the deal since the BFA announced it in November and advocated for it during the hearing.
She described the deal last year as "an innovative way to bring more investment opportunities to our state and position us as a leader in digital finance without risking state funds or taxpayer dollars."
Les Borsai, co-founder of Wave Digital Assets, said he could not comment on the decision.
Bitcoin's price has dropped roughly 50% from its peak in October 2025, according to Bloomberg News.
