GMO Quits Selling Mining Machines After Crypto Market Downturn

Japanese IT giant GMO Internet has said it will quit making and selling crypto miners following a year of bear market losses.

Tuesday that given the current "Increasingly competitive" business environment and weak crypto market, it will "No longer develop, manufacture, and sell mining machines."

On a consolidated basis, GMO is to record an "Extraordinary loss" of 35.5 billion yen, consisting of impairment loss and losses from transfers of receivables, which are worth approximately $104.2 million and $217.4 million, respectively, due to the sales of relevant assets.

"After taking into consideration changes in the current business environment, the company expects that it is difficult to recover the carrying amounts of the in-house-mining-related business assets, and therefore, it has been decided to record an extraordinary loss."

Its miner making business in September 2017 and set up its in-house mining operations in northern Europe at the end of last year.

The decision to quit its miner making business comes just months after GMO formally launched its B3 miner equipped with a 7nm mining chip.

The firm said Tuesday that it will continue to run its in-house mining operations despite the current tough conditions, and is planning to review its revenue structure and relocate its mining center to a new region with "Cleaner and less expensive" power resources.

"We are currently operating mining machines, and the depreciation cost will be almost zero after recognizing the impairment loss. Therefore, we will continue running mining operations if we can ensure that the revenue exceeds the electricity cost," the firm explained in a conference call.

GMO's crypto mining business reported a loss of 640 million yen.

Regarding GMO group's other businesses, including its crypto exchange business, the firm said in the conference call that it believes they have "High growth potential and will continue to position them as growing sectors" for its future growth strategy.