When Many Crypto Mining Companies Go Bankrupt, Canaan Keeps Profiting

Canaan operates thousands of crypto mining machines. (photo: Twitter @canaanio)

JAKARTA – The giant cryptocurrency mining company, Canaan, continues to generate significant revenue from their crypto operations despite the ongoing crypto mining crisis until the end of this year.

“Canaan's total revenue for the first nine months of 2022 is approximately 4 billion yuan (RMB), or about 573 million US dollars (IDR 8.9 trillion),” a spokesperson for Canaan told Cointelegraph. Previously Canaan expected to generate another 310 million RMB (IDR 718 billion) in Q4, bringing the total annual revenue expected to be 4.3 billion RMB (IDR 9.6 trillion).

This is down about 14% from Canaan RMB-denominated revenue of 4.9 billion RMB last year. In USD terms, total revenue fell by around 21% from USD 783 million (IDR 12.2 trillion) in 2021.

Canaan's 2022 annual revenue will still be much larger compared to previous years, which jumped by nearly 90% from 448 million RMB (IDR 999.1 billion) in 2020. In 2019, Kanaan's annual revenue amounted to 1.4 billion RMB (IDR 3.1 trillion).

Canaan's financial success over the past few years has come after the company launched its own mining operation, and expanded its services beyond manufacturing crypto mining hardware.

“We are starting our mining operations in mid-2021. One of our considerations is when there is a shortage of demand for mining machines, we can deploy some of our inventory into our mining operations to generate additional revenue,” said a spokesperson for Canaan.

Under certain circumstances, Canaan may resell their mining equipment.

“We balance the use of our machines through mining, and our mining operations serve as a strong support and complement to mining machine sales,” said a spokesperson for Canaan.

But the spokesperson declined to disclose further details on the use and resale of used mining equipment.

The news comes at a time when the crypto mining industry is experiencing a major crisis, with 100% of publicly traded mining companies having to sell almost all of the crypto they mine by 2022.

On December 28, crypto mining company Argo Blockchain sold its flagship Helios mining facility to Galaxy Digital to reduce its debt and increase liquidity. Previously, crypto mining company Core Scientific also filed for Chapter 11 bankruptcy on December 21 due to rising energy costs.