Digital currency processing firms are under tremendous financial pressure three months into 2020 amid the impact of the COVID-19 outbreak. This is forcing some organizations to close or restructure operations, sighting the global pandemic as one reason for their recent trouble.
One company that has recently announced they are restructuring is Riot Blockchain, a NASDAQ-listed crypto mining company based in Colorado. To mitigate its loss, Riot announced a partnership with Coinmint that will see it shift part of its digital currency processing operations to Coinmint facilities in Massena, New York.
They will ship the fleet of ASIC rigs from its Oklahoma City facility. It includes several Bitmain Antminer S17 hardware rigs recently purchased in mid-February. Before the outbreak, Riot had announced plans to expand this facility, but those plans are now in doubt.
The arrangement may offer Riot a pathway to avoid closure while lessening the economic impact that COVID-19 has had on its business. In the press release, Riot’s management stated this partnership would allow the company to decrease its operating costs, its impact on the environment, and increase its total hashing capacity.
The commercial agreement couldn’t come at a better time. Riot Blockchain recently submitted its annual 10-K report to the U.S. Securities and Exchange Commission (SEC). In its report, Riot warned that its operation faces harm because of the coronavirus. Riot disclosed that their ability to support the blockchain is being negatively affected by many factors, such as restrictions on its workforce and supply chain disruptions.
Riot is not the only publicly traded digital currency processing company signaling to the market that they are facing a rough road ahead. During its latest earnings call, Canada-based Hut 8 Mining Group informed shareholders that the pandemic might cause delays in receiving delivery of new mining machines.
“Three or four weeks ago, nobody thought…