⛏️ A Miner Incident

Last week we discussed financial contagion and how the actions of Sam-Bankman Fried and friends have infected the entire industry. Argo Blockchain (ARBK), a publicly traded, London-based cryptocurrency mining firm seems to be the latest to catch financial contagion.

• Due to a procedural blunder on December 12, the company announced that it would declare bankruptcy earlier than anticipated. As a result, trading in the firm’s shares was halted on Friday in both the U.S. and the UK.
• According to a filing with the London Stock Exchange (LSE), the firm is currently in advanced negotiations to sell some of its assets and carry out an equipment re-financing transaction to strengthen its balance sheet and improve its liquidity.
• Argo Blockchain is hopeful that it’ll be able to make these moves outside of voluntary Chapter 11 bankruptcy filings in the U.S. however, there is no reassurance it’ll successfully achieve this.
• The firm is now requesting that its listing in the U.K. be restored and expects that to happen “as soon as practicable.” Shares in Argo Blockchain have already lost around 94% of their value in the past year, vastly underperforming the rest of the industry.
• Argo planned to create a sizable bitcoin mining operation located in West Texas known as Helios. The facility began operating in May and has the goal of consuming 800 MW of energy whilst producing 20 exahashes per second (EH/s) of computing power.

Argo would have been the largest miner in the world, however, issues immediately surfaced, and the company discovered that facility expenditures were surpassing revenue, causing margins to contract over the ensuing few months. As the cost of energy has increased and the price of bitcoin has fallen, this has become a regular problem in the sector.