Mining Companies In Bankruptcy

The fall of bitcoin forces the closure of many mining companies 

The plans of the largest bitcoin mining in the United Kingdom have slowed down. Bladetech, a team of entrepreneurs who have worked on IT projects for NATO and BAE Systems, recognized in March the construction of facilities for the creation of the digital currency, which at that time was highly valued. However, the implementation now ensures that its proposals have had to be postponed due to “the cryptocurrency market crisis.”

They are not the only ones. Several crypto mining companies such as Theminingcloud, and hashflare among others and miles of amateur miners have opted to stop operating a root of the losses recorded by the sharp fall in cryptocurrency prices.

Many crypto mining companies have stopped operating

Experts estimate that the average cost of mining a bitcoin stands at $ 9,000, including overhead and depreciation costs.

But the digital currency is now trading at $ 8,200, 40% below the price of a year and a half ago. In the opinion of Aron van Ammers, technical director and founding partner of Outlier Ventures, a venture capital fund specializing in cryptocurrencies, “for many miners, the current price of bitcoin is below cost”.

Miners use computers that consume a lot of electricity to approve operations in a specific cryptocurrency and add them to a blockchain. Computer systems compete to solve complex mathematical problems, testing equations to authenticate the latest data incorporated into the network. The person who deciphers the code authorizes the search and obtains new cryptocurrencies as a reward.

Theminingcloud, another company that declared bankruptcy

On Wednesday, May 1, Theminingcloud, a Finnish crypto and blockchain firm, declared bankruptcy.

The crypto mining company has reportedly requested the protection of the Helsinki bankruptcy court, claiming that the company is “insolvent and unable to pay its debts when due”. 

According to court documents, Theminingcloud has assets between zero and € 50,000, while liabilities are assessed between € 10 and $ 50 million.

The general manager of Theminingcloud, Liang Zow, who led the company’s mining initiatives in Turkú Finland, said that so far in the company there are only a few employees left who have not been paid since February this year.

Theminingcloud’s debt with Bitmain

Chinese crypto mining hardware provider “Bitmain” ensures that Theminingcloud owes you more than € 6 million in ASIC mining equipment. Recall that bitmain also stopped its mining operations in Rockdale, Texas. Apparently, the company also had to lay off most of the employees, with the exception of two engineers and the human relations director.

By the end of 2018, both Bitmain and Huobi had confirmed their plans to fire staff. Some Chinese activists also suggested in the local media that Bitmain has had to dissolve its entire team of Bitcoin Cash (BCH) developers. In addition, Bitmain reported in December that it was closing its development center in Israel and firing local employees.