Bitcoin Mining Company Financial Difficulties, Bitmain Forced To Postpone Employee Salaries

Bitcoin mining company Bitmain. (Photo; Doc. Quartz)

JAKARTA - Bitmain, one of the main players in the Bitcoin mining industry, was forced to suspend payment of employee salaries due to the company experiencing financial difficulties. Not only that, Bitmain's growth is also fairly negative, especially related to the development of Bitcoin mining operations.

The decision to suspend performance and basic salary has an impact on all Bitmain staff. This action reflects the challenges facing companies that have dominated more than 70% of the global Bitcoin mining machine market share.

Bitmain's financial problems are nothing new. The dispute between its two founders, Wu Jihan and Zhan Ketuan, over the company's control has had a major impact on the stability and dominance of the Bitmain market. Despite reform efforts, such as the distribution of salaries into basic salaries and performance salaries in the first quarter of this year, the company continues to struggle.

In an official announcement in September 2023, Bitmain confirmed that its change in operating cash flow was negative and progress in mining engine production did not reach the expected standard. As a result, employee salaries were suspended, with the promise that payments would resume after the holidays on October 7, depending on the company's financial situation.

Even so, until October 8, employees have not received their delayed salaries, and bonuses by the end of 2022 have also not been paid. This announcement comes at a time when Bitmain is trying to take important business steps.

Last August, Bitmain announced the consideration of acquiring 27,000 Bitcoin S19j XP miners from Core Scientific, a large crypto mining company in North America. This is part of Bitmain's efforts to address its bankruptcy financial and restructuring problems.

Although the plan offers hope of a save for Bitmain, the suspension of employee salaries provides an overview of the uncertainty over the company's future. The question is whether a deal with Core Scientific will bring the required financial changes or whether Bitmain will continue to face greater financial difficulties. This situation will continue to be monitored by the crypto community.