A company in Australia has filed for bankruptcy protection, claiming that it will not sell its mining equipment as the country’s cryptocurrency mining industry is under increasing regulatory scrutiny.
The Australian Bitcoin Mining Association, which describes itself as “a community of dedicated bitcoin miners”, filed for Chapter 11 bankruptcy protection on Tuesday, alleging that the mining equipment was “incorrectly acquired” in the early hours of Sunday morning, ABC news reported.
The group has been struggling with high levels of competition, which have made it hard to meet production quotas, the Australian Financial Review reported.
Bitcoin mining equipment being sold at a local hardware store in Sydney, Australia, on August 31, 2017.
The company’s website says it was formed in 2015 by a group of mining hardware entrepreneurs, with the goal of developing and producing equipment that would “help increase the Bitcoin Mining Industry’s ability to produce the world’s highest quality bitcoin mining chips”.
It lists three main products, including a miner, which is capable of mining bitcoin with up to 21.5 gigahashes per second (GH/s).
The group also offers a mining pool and the company says its bitcoin miners are available in multiple variants, including the latest “Tigra” (or “tigra-core”), which is used for mining bitcoin using a CPU.
The filing also said that “all bitcoin mining operations and equipment is sold at fair market value”.
It has since listed the assets it owns as being worth $1.6 million.
A spokesman for the Australian Bitcoin Association told the Australian Business Traveller that the organisation was looking to “preserve the value of its assets” and that the filing was a “case study of how to operate in an environment that is changing”.
The filing states that the Bitcoin Association is “fully prepared to meet all the regulatory requirements and legal obligations of the Australian Government and the Australian community”.
“Our members and their families are committed to operating lawfully, with due regard for the rights of others, and have demonstrated that through our industry’s strong support for the Bitcoin and blockchain industries, they are doing this on an individual basis,” the statement added.
The association’s chief executive, Robert Burchfield, told the Financial Review that the company had a long history of involvement in the Australian cryptocurrency mining community.
“We’ve been involved in a lot of the community building,” he said.
“It’s not just for ourselves, we’re also involved with other companies, so we’re really passionate about it.”
Burchfield said that the Australian mining industry had faced “great challenges” since the launch of Bitcoin in 2012, when the digital currency gained mainstream acceptance.
“The Bitcoin community has had great success in the last three years and there has been a lot going on in the industry,” he told the publication.
“So we really wanted to get our feet wet and see if we could build up a little bit of a base and get our foot in the door.”
If you look at the Bitcoin community, there are a lot more than 10,000 members.
It’s a huge number of people who are active in it and active in the community.
“The company has also faced a series of lawsuits over the years, including one filed by the Australian Securities and Investments Commission last year which claimed that it was being misappropriated and used to illegally profiteer.
Burchfields group is also involved in Bitcoin ATM and Bitcoin Wallet, which are similar to the Bitcoin hardware companies.
Bursar, the chief executive of Bursar Capital, said that it has invested in a number of bitcoin companies, including Burser, Bonsai and Blockchain.
He told the newspaper that the group’s aim was to be the “go-to” company for “a variety of industries and organisations”.”
We want to be a place where people can go in Australia, and we’re the first to get there,” he added.”
And we’re looking forward to being a leader in Australia’s bitcoin community.
“A spokeswoman for the Federal Securities and Investment Commission (FSIC) confirmed to CoinDesk that it is aware of the filing, but could not comment further until it has been fully vetted.
However, the spokesperson said that FSSI does not comment on individual companies and the agency is in contact with the ASIC.