No End in Sight for Bankruptcy of Mining Firms

By Swati Kishore

As per our news dated January 15, 2019, the US-based crypto mining firm Giga Watt is officially out of business. Giga Watt, which went bankrupt last year, has shut its operations amid the bear market that saw the prices of Bitcoin and other cryptos slide from their highs in 2018. This news highlights a trend where some of the biggest mining firms have been shutting shop since past few years.

Just a year after its launch, Giga Watt announced to its community, in 2018, through a Telegram message that it had gone bankrupt and that it will be shutting down operations. The message read,

“As was reported in November of 2018, Giga Watt voluntarily filed with the Bankruptcy Court seeking debt relief and reorganization. Subsequent to the filing, day to day operations continued until now. At present, both access and power to the facilities in which Giga Watt operates have been closed to the company.”

Notably, Giga Watt had filed for bankruptcy at a court in Washington’s Eastern District in November 2018. During the filing, it was revealed that the mining firm owes its creditors as much as USD 7 million.

Even though the firm was able to continue its operations until the mid of January, however, it has announced that it will not be able to refund its WTT token investors. However, on a positive note, Giga Watt mentioned that it will be able to return some of the mining equipment to the customers. The announcement read,

“Customers will receive an email notification within the next two weeks with the tracking information for their shipments.”

The closure of Giga Watt does not come as a shock to the crypto community. The persistent bear market has resulted in the closing of several mining firms due to falling revenues during the past few years.

Knc Miner, a fast-growing mining firm, had in 2016 filed for bankruptcy. Despite raising at least USD 32 million investors, the firm had to finally shut its operations.

21E6, which later became 21.co., was one another one of the promising mining organisations. In 2013, the firm had raised USD 70 million in funding. But things didn’t go as planned as the falling revenue made the firm shut its mining business eventually.

We can only count the number of firms which have had to face the same fate. Alydian, Hashfats, and Cointerra are some of the prime examples.

The slump in the prices of Bitcoin has meant that the mining of the cryptocurrency has become less and less profitable. Many mining firms that have resolved to continue their operations have had to move base to countries where the climate is cooler and the electricity is cheaper. As of now, we don’t really an end to the woes of mining businesses.