ETHERLive
ETHERLive delivers real-time price and volume data across 16+ exchanges to users in a clear and easy-to-understand package. Users can get up-to-the-second updates for each exchange/currency pair, as well as aggregated market averages for each exchange, currency, and the market as a whole. It also provides a global converted average of all the currency pairs monitored by ETHNews, converted to USD.

---

24hr ---
--%
Wednesday Mar 20th 2019
RESOURCES

The Basics

Learn the basics of Ethereum and various cryptocurrency technologies

Learn More

What is Ethereum?

Understand the underlying principles of the Ethereum Platform

Learn More

The Blockchain

Discover the revolutionizing technology known as the blockchain

Learn More
SUBMIT

Press Release

Submit a press release for consideration on ETHNews

Submit Press

Story / Dapp

Submit a story or DAPP to be considered for publication on ETHNews.

Submit Story

Explanation

Submit "Ethereum Explainer" content for consideration to be featured on ETHNews

Submit Topic
ETHNews Logo
---
--%
Home
News
Etherlive
Ether Price Analysis
Resources
Contact Us

GMO Internet To Stop Manufacturing And Selling Mining Rigs

By

Nathan

Graham

WriterETHNews.com

Although the company is going to stop making and selling mining rigs, it will continue its in-house mining operations.

Japanese information technology company GMO Internet announced on December 25 that the company would no longer manufacture or sell crypto mining rigs due to an "extraordinary loss in the cryptocurrency mining business" during the last three months of 2018.

GMO Internet says it will record a consolidated loss of approximately 35.5 billion Japanese yen (JPY) – about $320 million – due to the recent decline in virtual currency prices, which has caused the sales of mining rigs to plummet.

According to the announcement, the IT company lost 24 billion JPY from the manufacturing and sales of devices used to mine cryptocurrency. The other 11.5 billion JPY in consolidated losses is due to "impairment loss." Impairment losses occur when an asset's value is higher than its future returns. In other words, GMO wouldn't be able to make its money back.

GMO Internet began providing internet services, including hosting and website creation support, in 1995. The company decided to get into the crypto mining business in September 2017. Mining's impact on the company has been marginal at best. In May, it released its financial statement for the first quarter of 2018, which shows the company recorded a net loss of JPY 735 million. The factors that contributed to this loss are not specified.

According to the 2018 third quarter financial results published in November 2018, GMO Internet's crypto mining operation suffered a loss of approximately JPY 640 million due to "worsening external environment" which in turn caused a drop in demand for mining rigs and therefore in the price of these machines.

The company's latest announcement states that GMO Internet will continue its crypto mining business – just not the mining rig manufacturing side – but will relocate its mining center to a "region that will allow [the company] to secure cleaner and less expensive power supply." It is not specified what type of miner the company will use to continue this operation if not its own. The statement also mentions that GMO will assess the "revenue structure of its in-house mining business."

In an effort to quell the fears of customers and investors, GMO Internet stated, "The Company ensures financial integrity even after recording an extraordinary loss through the sale of shares in subsidiaries."

Crypto winter has drastically affected many participants in the crypto ecosystem. In November the CEO of Steemit Inc, best known for its eponymous social media site, announced he would lay off about 70 percent of his staff due to the changes in the crypto market. In December blockchain company ConsenSys said it was laying off of 13 percent of its staff, which many connected to the falling price of Ether. And just this week, Bitmain, which is heavily involved in producing and selling mining rigs, suggested it would be making mass layoffs.

GMO Internet was not available for comment by press time.

Nathan Graham

Nathan Graham is a full-time staff writer for ETHNews. He lives in Sparks, Nevada, with his wife, Beth, and dog, Kyia. Nathan has a passion for new technology, grant writing, and short stories. He spends his time rafting the American River, playing video games, and writing.

ETHNews is committed to its Editorial Policy

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest GMO Internet, Crypto winter or other Ethereum business and finance news.