Mining if the lifeblood of many top cryptocurrencies. This is especially true for Bitcoin, as miners validate transactions and protect the network at the same time. Not every project in this space is legitimate, however, Bcause Mining is one interesting example. Despite receiving a grant from a US city, they are now forced to liquidate assets.
What is BCause Mining?
Most people in the cryptocurrency world may have never heard of this Bitcoin mining outfit. The company decided to set up shop in Virginia Beach, Virginia over a year ago. Their original plan was to build a huge mining farm and even expanding it to a local rented warehouse. That investment would amount to almost US$65 million, albeit things never amount to much in the end.
It has to be said, the Virginia Beach city council was rather pleased with what Bcause Mining had in mind. So much even that they were given a grant of nearly US$500,000 a year ago. That grant would help the company get up and running, as it was seemingly expected the mining unit could create a few jobs for locals. Unfortunately, their business model was very different from what was proposed initially. A somewhat common business practice in the world of Bitcoin mining.
It quickly became apparent BCause Mining would not make that investment in cash or any other form of financial asset. Instead, their entire mining operation is based on letting other people send over their mining units and pay fees to the company for hosting and maintenance. Despite this being a completely legitimate business model, it also appears the company wasn’t paying all of its customers correctly.
To be more specific, several creditors claim Bcause Mining owns them up to US$11.3 million. That is quite a substantial amount, partially due to the rising value of Bitcoin in recent years. Why that money is owned, remains unclear. It is possible this is the value of the creditors’ mining equipment located at their facility, which simply needs to be returned to their rightful owners. Given how the company is now forced to liquidate its assets, it will be interesting to see what happens exactly.
Any Impact on Bitcoin?
It seems unlikely this forced liquidation will cause any major Bitcoin price changes. Although Bcause Mining will liquidate its assets, that doesn’t mean any potential cryptocurrency holdings will be dumped on the open market. Creditors may agree to receive a sum in Bitcoin to cover their claims accordingly. Even if the company was to dump its BTC holdings on the market, it would – most likely – not even make any dent in the price whatsoever.