This year has witnessed a series of unfortunate news from the crypto industry, companies have declared bankruptcy, and investors have been rug-pulled by projects and developers. It has been a shattering experience for everyone involved in the Web3 universe.
Yet again, another crypto company based in London has announced via its press release that there is a chance it might be shutting down due to its inability to secure £24 million (US $27 million).
It was shocking news to all as Argo Blockchain, a London-based bitcoin mining company, stated that it could not meet its target; this could be the beginning of the end for the profitable company.
How Did This Happen?
On October 31, 2022, Argo Blockchain issued a press release announcing the tragedy that has befallen it. Earlier in the first week of October, Argo had announced that it was pursuing strategic actions to gain an investor, which would bring in a worth of $27 million to the company through a subscription of ordinary shares, and further increase the growth and activity of the company.
However, for unknown reasons, Argo Blockchain (ARB) told the London Stock Exchange that the subscription would not be consummated; hence, it has yet to achieve its goal. The Bitcoin (BTC) mining company has decided to execute dire actions to keep its head afloat.
Although Argo Blockchain has said that it will keep seeking financial opportunities, there is no surety the company will sign a definitive agreement. Fortunately, there is still a chance for ARB to turn around as the company will be in operation and maintain its capital for a year. If Argo fails to gather funds and investors after this, it will ultimately cease to operate.
Due to the recent lack of cash flow in the mining company, Argo has made some sales of its holdings, selling 3,843 Bitmain S19J Pros for $5.6 million. This sale is considered a loss as Argo had initially planned to sell 3,400 miners for $7 million. The machines were the last collection of the original Bitmain, fixed for installation in October 2022.
Argo is deeply affected by the bear market, which is why it has pushed to make sustainable decisions in hopes that it will bounce back when an investor comes to aid its cause through a subscription for conventional shares.
What Is The Argo Blockchain?
The Argo Blockchain is a mining company listed on Nasdaq, which powers the world’s leading cryptocurrency by using renewable energy to boost the development of blockchain technologies. Though based in London, Argo boasts of running an efficient 220 megawatts (MW) mining facility in Canada, Texas, and is one of the world’s leading mining operations.
Taking climate change into cognizance, Argo Blockchain became the first climate-positive crypto mining company through the Crypto Climate Accord in 2021.
Controversy Around Argo Blockchain
The Argo Blockchain has been in debt to a significant player in the crypto industry, owing Galaxy Digital, a crypto investment firm owned by Michael Novogratz.
To cut the debt owed to Galaxy Digital, ARB joined one of the few mining companies to sell its self-made cryptocurrencies, selling 637 BTC in June and 887 BTC in July 2022. Other companies which also sold their self-mined BTC are Core Scientific, Bitfarms, and Riot Blockchain.
Argo Blockchain is one of many crypto mining companies that have lost a lot and is due for closure. A similar mining company, Core Scientific, filed forms with the US SEC (Securities and Exchange Commission) amidst bankruptcy rumors on October 26, 2022, after pointing out several issues that led to its current state in the crypto world.
The constant fluctuation of prices of cryptocurrencies this year has led to unfortunate events in the crypto industry. Tragedy did not only affect the cryptocurrency mining companies. Coinbase laid off 1000 employees, reducing its workforce by 18%. Three Arrows Capital, a Singapore hedge fund, also filed for bankruptcy in July 2022 as it had put its hopes on the rise and growth of the Terra ecosystem.
The unsavory rise of the bear market in the crypto world has led to the closure of many booming crypto companies. Argo Blockchain is the latest company to fall victim to the economic meltdown of cryptocurrencies as it has failed to acquire £24 million ($27 million). The loss of an investor has the world wondering if this might be the beginning of the end for the Bitcoin mining company.