Due to “challenging conditions” in crypto markets, Argo Blockchain (LSE:ARB), a cryptomining firm that went public in the UK last year, is no longer accepting new customers for its “mining-as-a-service” program (also known as “cloud mining”), and will terminate all contracts as of April 1, 2019, a press release from the company states.
The release states that the “temporary” shut down has been brought about by “difficult” conditions in crypto markets:
“Argo, …(LSE:ARB), announces a refocus of its business strategy in light of the continuing difficult trading conditions in the cryptocurrency market as digital currencies face severe price pressure and volatility.”
According to the company’s website, Argo’s cloud mining customers paid a “transparent monthly fee,” to the company to gain, “immediate access to Argo’s cutting-edge mining rigs, which seamlessly perform complex crypto-mining operations for our users and then directly deposit all coins mined into users’ digital wallets.”
The decision to close cloud mining has been made despite company claims of, “more than six months of better-than-expected growth achieved by Argo’s consumer business since its launch in the summer of last year.”
Argo says it will now focus on its own autonomous mining operation, for the time being:
“The Company is temporarily moving away from MaaS to mining directly for its own account.”
The closure of cloud mining and additional cost-cutting measures are expected to, “lower Argo’s mining cost base, including ongoing expenses, by 35%.”
“The redeployment of the mining infrastructure and capital is expected to be profitable following a material reduction in input costs achieved from suppliers.”
Argo co-founder and director Mike Edwards said the “disappointing” move is nonetheless “proactive and strategic”:
“While it is disappointing to make this shift after delivering better-than-expected growth during our first six months as a consumer business, we need to be prudent and act decisively in order to ride out the downturn and be in a strong position when industry fundamentals improve.”
Argo reportedly began as a largely subscription-based crypto cloud mining firm for people interested in indirectly mining Ethereum and altcoins.