Chinese crypto mining giant, Bitmaintech Israel which was founded in 2016, will be closing its doors this week due to the crypto market decline. Head of the branch, Gadi Glikberg told The Globes that the crypto market had undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.
As per Israeli media reports, 23 people will be laid off including the Vice President Gadi Glikberg. Earlier this year, Bitmaintech was building a $500 million mining farm in Texas in the US and was due to open in 2019. It remains to be seen whether the deadline will be achieved, or it will end up closing its doors before it even opened.
According to Cointelegraph, Bitmaintech Israel was founded to explore the use of blockchain technology, work on the Connect BTC mining pool and develop the infrastructure behind Bitmain’s artificial intelligence (AI) Project Sophon. According to CTech, after raising $400 million in a pre-IPO round in June, Bitmain had submitted a prospectus in August, in preparation for a listing on the Hong Kong stock exchange. “However, the filings revealed that Bitmain had experienced a consistent erosion in its profit margins in the last few years.”
Besides the market decline, the mining giant is facing two lawsuits. The first is a class action lawsuit of $5 million for unauthorized mining which was filed in California’s North District Court against the company’s US and China-based entities. And the second lawsuit against Bitmain, Bitcoin.com, Roger Ver and Kraken Bitcoin Exchange for allegedly using unfair methods and practices to manipulate the Bitcoin Cash (BCH) network.
Bitmaintech is not the only company to be suffering from cryptocurrency downturn. The ripple effect is being felt by other blockchain businesses worldwide. In October, it began its great slide. CNN stated economist Nouriel Roubini describing cryptocurrencies as the ‘mother of all scams’ and called the losses ‘crypto-apocalypse.’ Some analysts said that panic selling could contribute to cryptocurrencies fall in value, though the reason for the sudden market fall is not known.
Despite the cryptocurrency downturn, Bitmain remains the world’s largest producer of cryptocurrency mining chips.