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However, the company will continue with its in-house mining business, after relocating its mining operations to a region with cheaper power supply.
Unexpected news has come from Japan: Japanese internet giant GMO Internet Group has decided to close down its crypto mining hardware business. The company “will no longer develop, manufacture, and sell mining machines.”
According to the press release published on December 25, the company resolved at the meeting of the Board of Directors to post an extraordinary loss in the cryptocurrency mining business for the fourth quarter of the fiscal
year ending December 2018. The total mining business reported a consolidated loss of JPY 35.5 billion (approximately $322 million USD) and 38.0 billion (approximately $345 million USD) in non-consolidated losses.
The announcement reads:
“After taking into consideration changes in the current business environment, the company expects that it is difficult to recover the carrying amounts of the in-house-mining-related business assets, and therefore, it has been decided to record an extraordinary loss.”
Further, the press release states:
“Regarding the current mining machine markets, the environment is increasingly competitive because of the decreased demand mainly due to the decline in the cryptocurrency price, the decline in the sales price, etc.”
GMO Internet said:
The company expects that it is difficult to recover the cryptocurrency mining business-related assets through selling mining machines, so the company has decided to stop the development, manufacture, and sales of mining machines, thereby recording an extraordinary loss.
However, the company will continue with its in-house mining business, after a review of its revenue structure, as well as maintain mining operations with the GMO Internet office as headquarters. According to the company, it decided to relocate its mining operations to a region with cheaper power supply.
GMO Internet said:
“In terms of the electricity cost, we will relocate the mining center to a region that will allow us to secure cleaner and less expensive power supply. GMO Internet will review the revenue structure of its in-house mining business, and continue running mining operations with the GMO Internet as a headquarter(s).”
GMO first launched its mining business in September 2017 and set up its in-house mining operations in Switzerland at the end of last year. The decision to stop mining comes just months after GMO formally launched its B3 miner equipped with a 7nm mining chip.
Bitcoin Miners to Shut Down
GMO is not the only mining hardware producer that closes down its business. Recently, Bitmain, the world’s largest mining conglomerate, closed its Israeli operation because of unviable mining operations. Bitmain was one of the most vulnerable miners at low price levels considering their hoarding of Bitcoin Cash which was sitting at historic lows at the beginning of this month. Currently, there are rumors that the company is laying off a substantial number of workers.
At the beginning of December, Autonomous Research LLP estimated that at least 100,000 individual miners had shut down. According to Fundstrat Global Advisors LLC, about 1.4 million servers have been unplugged since early September.