News has emerged that HashFlare, a cryptocurrency cloud mining service, has decided to terminate its bitcoin mining service.
With bitcoin struggling throughout 2018 thus far, HashFlare is citing a lack of profitability in their bitcoin mining operation and has decided to close up shop for the time being.
In a statement that was published on the company’s Facebook page, they said –
“We have made every possible effort in order to resolve the problem that has arisen – for instance, we have considered a variety of technical solutions, which would have allowed us to lower expenses related to maintenance and electricity. However, due to the general instability of the market, the actions we have taken could not significantly influence the current situation.”
The statement also claims that users have faced a situation where payouts have been lower than maintenance fees for the past 28 days.
At this point, the company decided to terminate their bitcoin mining service “in accordance with clause 5.5 of our Terms of Service, which are required to be accepted when creating a purchase and are the basis of concluding the contract.”
A report produced by analysts at Morgan Stanley claimed that bitcoin miners would find themselves operating at a loss if the price of bitcoin dropped below $8,600, which happened in mid-May of this year.
In a separate move that many find difficult to see as coincidence, HashFlare also introduced new know-your-customer and anti-money laundering rules that have restricted unverified customers ability to withdraw funds.
At the time of writing many customers have their funds trapped in the HashFlare system, and as you can imagine, these recent developments have not gone down too well.
Many customers of HashFlare’s bitcoin mining service are claiming that the company has simply taken their money, bought mining hardware, and canceled the contracts of those who have invested just as the price of bitcoin is starting to rise.
In theory, this would leave HashFlare in control of the mining hardware, and free to collect 100 percent of the profits, with no client payments to make.
It will be interesting to see if HashFlare decides to restart their bitcoin mining service if and when the price of bitcoin rises again to a level where profit is viable.
Until that point, the company that operates out of Edinburgh, Scotland, is no longer a part of the bitcoin mining business.
Lover of all things crypto, blockchain and AI, professional tech scribe & part of the editorial team at Crypto Disrupt.