The mining giant Bitmain, which is based in China, and which is the producer of the mining ASIC hardware, has decided to temporarily suspend operations in Rockdale Texas, part of it because of the critical drop in crypto prices, according to the reports of the public radio station Texas Public Radio from the 10th of January.
Suspending mining operations in Rockdale Texas
The news actually came amid reports a new CEO is actually going to be named to replace the co-founders Wu Jihan and Zhan Ketuan. Rockdale is located in Milam Country, east of Austin, in the United States state of Texas.
Bitmain has announced the launching of its Rockdale data center back in the summer of last year. Estimates said that the new facility is going to bring about 400 local jobs to Rockdale in the first two years. A lot of in the roughly 5,800-people strong city have been interested and also eager to see what company could bring to the field.
Greater Milam Country has been struggling economically after the Alcoa power plant and also a smelter shuts down, contributing to a 30% loss in tax revenue.
Steve Young, a Milam Country Judge, issued a statement reporting that all of the employees of Bitmain, but two engineers and the director of human relations were laid off, and all the operations were suspended.
The decision of Bitmain met with disappointment
This decision made by Bitmain came as a disappointment to Young. The judge described the mining operation as a step in the right direction to bring some positive news, tax revenue, as well as jobs to the area. Bitmain also had 7,000 to 8,000 servers in the Rockdale mining facility and had also poured millions to renovate the old Alcoa power plant to meet its needs.
According to some reports, Young said that the company told him Rockdale is going to have the ability to continue with a scaled-back plan, although some initial reports confirmed that the operations were suspended, as there are now only five employees working instead of 15. He said that Bitmain spent millions thus far to renovate the builders.
The officials of Rockdale have spent a lot of time marketing the land which is around the old power plant to some other companies because of the presence of a big power grid and other different organized infrastructure. The officials of the country pitched the area to Amazon when it has been searching for a second headquarters spot.
According to the same reports, Young said that the collapse of the price of Bitcoin or BTC is the reason for the new and less ambitious plans. A spokesman from Bitmain said that the right-sized team at Rockdale now was the expertise to re-begin the project at small scale anytime. Bitmain would also like to ramp up the site at a slower pace and scale based on market conditions.
Trouble on the horizon for the company
Young also declared that Bitmain committed to hiring locally and insisted on paying the school district taxes, opposite to taking an offered abatement. According to some reports, the question is still concerning the 10-year tax break on country taxes on real, as well as personal property.
According to some reports from August 2018, Bitmain intended to build a $500 million blockchain data center and also a mining facility in Texas, as part of the expansion into the U.S. market.
Bitmain saw its company go through dramatic shifts, trying to adjust to the prolonged crypto bear market. It also filed for an initial public offering or IPO in Hong Kong in September last year.
According to some media outlets, Bitmain was planning to let employees go from different projects. In December last year, it was said that Bitmain and crypto exchange Huobi profoundly confirmed their plans to lay off staff.
The company has also has some troubles with the U.S. federal court over allegations it has been siphoning processing speed off to the company and even fired an essential number of its workforce.