Bitcoin Giant KNC Miner Files For Bankruptcy

“Due to the high uncertainty about Bitcoin halving coming in July, combined with continued rapid increase in competition from our competitors, so the company will be very difficult to meet its obligations,” the company’s co-founder and CEO in a statement.

“We knew there were risks of doing it here in Sweden. We were aiming towards the clouds, not on building a mediocre midsize business. We took the big investors and chances spirit. But it has not paid off. ” 

The company raised $3 million (28 million SEK) in December last year but has apparently still been forced to shut down. The money was used to build a new server center. With the new center, the company was able to make 80 quadrillion calculations per second. However, because of the bitcoin block reward halving, the increased capacity would not result in any substantial increase in revenue.

Sam Cole also highlights the increasingly fierce competition – and the Swedish energy tax.

In Denmark, for example, data centers pay about 0.5 cents per kilowatt hour – in Sweden, the figure is 19.2 cents per kilowatt hour.

“44% of our income goes to energy costs. If we had had that the rest of this industry, so we had not gone bankrupt today. But we do not know if or when it will be changed.”

But how does it feel for you as founder and president?

“It feels a little like selling my own baby. So it’s not a pleasant day. But it is the right decision.”

How have investors reacted to the decision?

“They also knew of the risks when they gave us the money, Creandum has been with us all the way, and we could have asked for more money. But enough is enough. “

What will happen now is that Nils Åberg the bankruptcy trustee, shall examine whether it is possible to run the ‘KNC Miner’. At the moment, there is no sale date.

A total of 35 employees currently affected by the news.

In 2014, turnover of KNC Miner SEK 640 million and made a loss of 30 million.

It now seems as if KNC’s own prognosis was too bullish.

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