The Japanese giant GMO Internet has said it will stop producing and selling crypto miners after a year of losses in the bear market
L & # 39; Company announced On Tuesday, given the current "increasingly competitive" business environment and the weak encrypted market, "it will no longer develop, manufacture and sell mining machines".
On a consolidated basis, the OGM records an "extraordinary loss" of 35.5 billion yen (or $ 321.6 million), consisting of losses in value and losses arising from transfers of loans, which are approximately $ 104.2 million and $ 217.4 million, due to sales of relevant goods.
The company stated in its statement:
"After taking into account the changes in the current business environment, the company expects it to be difficult to recover the accounting values of the company activities related to internal mining activities and, therefore, it was decided to record an extraordinary loss".
First GMO launched its mining activity began in September 2017 and started its internal mining activities in northern Europe at the end of last year. The decision to abandon its mining business comes only a few months after GMO officially launched its miner B3 equipped with a 7 nm mining chip.
The company, however, said Tuesday that it will continue to manage its own mining operations despite the current difficult conditions and is planning to revise its revenue structure and relocate its mining center to a new region with power " cleaner and less expensive "resources.
"We are currently operating mining machinery, and the cost of depreciation will be almost zero after recognizing the loss in value, so we will continue to perform mining operations if we can ensure that revenues exceed the cost of electricity," he said. explained the company at one point telephone conference for institutional investors on Tuesday. However, he has not yet decided the full details of his new plans and if this will help to improve his profitability.
The activity of crypto mining of GMO has reported to loss of 640 million yen (about $ 5.6 million) in the third quarter of 2018, a further decline from the second quarter loss of 360 million yen (about $ 3.2 million). The GMO said that the poor performance was due to a deterioration of the external environment and the increase in amortization costs.
Regarding the other activities of the GMO group, including its cryptocurrency activities, the company stated in the conference that it considered "high growth potential and will continue to position them as growing sectors" for its strategy of future growth.
Image of mining facilities through Shutterstock