Investing in Bitcoin (BTC) mining is always risky. This fact has been proven in Canada, the only country that let mining corporations seek state investments.
When Delusions Crash
Great North Data (GND), a start-up that hosted data processing centers in Labrador, Canada, recently declared bankruptcy. It handled BTC mining operations and processed artificial intelligence algorithms at facilities in Labrador City and Happy Valley-Goose Bay, both of which are located in remote provinces in Northern Canada.
Documents presented by the company's governance show a large financial disaster. Great North Data listed $13.2 million in liabilities against just $4.6 million in assets. It is a sign of a dangerous long-term cash flow policy conducted by the company.
The distinguishing feature of this crash is the wide use of public money raised by the mining giant. According to CBC, the company received an infusion of $500,000 from the state-owned Atlantic Canada Opportunities Agency in late 2015 in the form of an unconditionally repayable contribution (URC). Newfoundland and Labrador's Business Investment Corporation are owed $313,718.
More Tragedies to Come
It is interesting that Great North Data was not a newbie to "costly" gossip. In 2017, a Hong Kong-based bitcoin mining firm, which supplied mining machines for GND, sued the start-up in Newfoundland and Labrador Supreme Court. The legal dispute remains unresolved.
This is not the first time that the total failure of a BTC mining fat cat is in the spotlight. Previously, another mining mogul named Canaan Inc. failed to raise 25% of its planned initial public offering (IPO). Instead, the company raised a mediocre $90 million in capital. This cap is 10% smaller than what was anticipated, and 77.5% smaller compared to the figures of the initial IPO cap.
So, it needs to be mentioned one more time that investing in mining capacities are extremely risky when it comes to investing in cryptocurrencies. It is more likely that the investments cannot be released by investors since the firm's official website is offline, leaving users in the dark.
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Alex Dovbnya
Yuri Molchan
Tomiwabold Olajide
