Bitmain shuts operations in Texas. Bitmain, the leading manufacturer of cryptocurrency mining rigs, and ASIC mining hardware producer has reportedly suspended its mining operations in Rockdale, in the United States state of Texas where the company was supposed to build the largest mining operation in the country, as reported by the Texas Public Radio on January 11, 2019.
The major reason for suspending all its mining operations in Texas is especially due to the drop in cryptocurrency prices. As a result, new CEO can replace co-founders Wu Jihan and Zhan Ketuan.
Further, Bitmain reported the launch of its Rockdale data center back in the summer of 2018. Assessments were that the new office would bring about 400 local jobs to Rockdale in the initial two years. The approximately 5,800-person strong city was intrigued and eager to perceive what Bitmain could convey to the territory. Greater Milam County was battling monetarily after the Alcoa power plant. As a result, smelter shut its doors, adding to a 30% loss in tax revenue.
Although, there are currently five employees instead of 15. Steve Young, a Milam County Judge said. All Bitmain employees had been laid off with all operations been suspended. Young reportedly stated:
“They have spent millions thus far to renovate the buildings. […] I’m told there are 7,000 or 8,000 servers out there already.”
A spokesperson for Bitmain told Young that, Bitmain shuts operations in Texas and staff reductions were happening across the company as a result of the collapse of the price of Bitcoin (BTC), but that the Rockdale operation will continue to work.
“The right-sized team at Rockdale now has the expertise to re-start the project at small scale anytime. Bitmain would like to ramp up the site at a slower pace and scale based on market conditions.”
“Sharp Drop In The Value Of Bitcoin” – Cause For The Shutdown
As indicated by Young, the “sharp drop in the value of bitcoin” forced the organization to stop activities at its Rockdale location. Bitmain reported that they would put over $500 million into the Alcoa power plant. This provides around 400 occupations to the area in July 2018. Meanwhile, Bitcoin was worth over $8,000.
With the coin’s value currently floating around $3,600, the organization is encountering huge financial difficulties. Bitmain has apparently laid off a portion of its workforce and has shut down its operations in Israel.
Additionally, Young announced that Bitmain committed to hiring locally and demanded to pay the school area taxes instead of taking an offered reduction. As per the article, the inquiry remains concerning the 10-year tax reduction on region charges on the genuine and individual property.
In December 2018, Bitmain and major crypto trade Huobi have purportedly affirmed their intentions to lay off staff.