Bitmain has been looking worse for wear for a number of months. Things now appear to be going from bad to worse for the Chinese crypto mining hardware manufacturer. The company is facing two high-profile legal battles, as well as a decline in sales in North America following a hike on import taxes of Chinese goods. On top of this, Bitmain has also allegedly lost more than $740 million in the bear market after making several bad investment decisions. The news of Bitmain shutting its operations in Israel is simply another nail in the coffin for the struggling hardware manufacturer.
Crypto Collapse Hitting Bitmain Hard
Gadi Glikberg – Bitmain’s Vice President of International Sales – cited the yearlong crypto collapse as the sole reason behind the decision to shut the Israeli office. The office employed 23 personnel who were focused on developing the Connect BTC mining pool, as well as its artificial intelligence (AI) program – Sophon. All 23 employees from the Israeli office will be terminated rather than relocated to other areas of the company.
Going Out in Style
If Bitmain’s future has already been decided, its actions in the recent Bitcoin Cash hash war could be seen as one last hurrah. What better way to go out than all guns blazing taking down Craig Wright and Calvin Ayre’s pet project, Bitcoin SV. In a lawsuit filed against the firm – along with Roger Ver and Kraken – Bitmain allegedly rented out its impressive mining power to help Bitcoin ABC win the hash war by a significant margin.
$5 Million Lawsuit Pending
Unfortunately, the lawsuit for its activities during the Bitcoin Cash hash war isn’t the only legal issue it’s facing. In California, more than 100 plaintiffs have joined forces to lodge a case against Bitmain saying that it illegally mined cryptos. A group of miners bought Bitmain mining rigs, but forgot to properly configure them when installing them into a farm, meaning the miners ran on the default Bitmain mining pool rather than with the new owner’s pool. This lawsuit is a little flimsy and could end up going Bitmain’s way, but nonetheless it’s still a worrying sign for a company.
Massive Bear Market Losses
In a leaked report, Bitmain has allegedly lost more than $740 million through a series of bad investments and business decisions. It’s well known for storing a large portion of its wealth in Bitcoin Cash, and the hash war severely damaged the cryptocurrency’s value. This coupled with a prolonged bear market and reduced sales of hardware in North America has left the firm struggling.
23 Bitmain employees losing their jobs before Christmas is certainly sad news, but it’s more concerning for those still working for the firm. 2019 could bring another wave of layoffs, before the company eventually sinks altogether. What is for sure is that Bitmain’s AI project is dead in the water – which is sure to leave many unimpressed.