GMO Internet, the Japanese IT giant, said it would stop producing and selling cryptocurrency miningMining
– is a type of activity for creating new blocks in the Blockchain to ensure proper system operation. Details equipment due to problems in the cryptocurrency market, as reported by CoinDesk.
On Tuesday, the company announced that, given the current "increasingly competitive" business environment and the weak cryptocurrency market, it will no longer develop, produce and sell mining equipment.
On a consolidated basis, GMO must register for "unexpected losses" in the amount of 35.5 billion yen (or $ 321.6 million). Recorded "unforeseen losses" will have to consist of recording impairment losses; losses from the transfer of receivables. The total amount for the legal closure of the company should be approximately $ 104.2 million and $ 217.4 million, respectively.
"Taking into account changes in the current business environment, the company expects that it will be difficult to restore the book value of business-assets related to the extraction of cryptocurrency, and therefore it was decided to register emergency losses" – GMO Internet.
Recall that for the first time, GMO started a cryptocurrency mining business in September 2017, and at the end of last year began its own production in Northern Europe. The decision to cease production of equipment for miners was made several months after GMO officially launched its miner B3, equipped with a 7 (nm) chip.
The firm, however, said on Tuesday that it will continue to conduct its own operations for the extraction of cryptocurrency (pools), despite the current difficult conditions. At the same time, it plans to revise the structure of her revenues and move her production center to a new region with "cleaner and less expensive" electricity.
"Currently, we use mining machines, and the depreciation cost will be almost zero after recognizing an impairment loss (...) Therefore, we will continue to work on the extraction of cryptocurrency, if we can provide the necessary conditions (...) so that the revenue exceeds the cost of electricity" – from the GMO telephone-conference.
GMO reported a loss of 640 million yen (about 5.6 million US dollars) in the third quarter of 2018, which is another decrease after a loss in the second quarter of 360 million yen (about 3.2 million US dollars). At that time, GMO said that poor performance was caused by a deterioration in the external environment and an increase in depreciation costs.
As for the other businesses of the GMO group, including its crypto-exchange business, the company said at the conference that it believes that they have "high growth potential and will continue to position them as growing sectors."
Editor: Yuliya Soroka