Genesis Mining Compels Certain Customers to Upgrade BTC Mining Contracts

Iceland-based hashpower hosting service Genesis Mining is compelling some of its customers to upgrade their Bitcoin (BTC) mining contracts following this year’s significant cryptocurrency price decline, according to an August 17 statement.

In 60 days, the company will terminate services for open-ended contracts that mine less than the daily maintenance fee. Genesis claims that the downward trend of BTC around January and heavy decline in crypto mining in April and May resulted in a reduction of mining outputs.

If customers wish to continue using Genesis’ services, they have to upgrade their existing BTC mining contracts to premium five-year contracts. Genesis notes in the announcement:

“...as a hashpower hosting service, we can only influence one out of the three main factors that determine mining rewards, and that is the infrastructure… The market price of Bitcoin and the mining difficulty are factors we cannot control.”

Genesis Mining was started in 2014, with locations in Bosnia and China. The company subsequently moved to Iceland and Canada due to the cold climate and cheap electricity rates.

In March, Genesis was issued a cease and desist order and asked to leave the state of South Carolina due to selling “unlicensed securities.” South Carolina demanded Genesis not only halt operations within its borders, but pay an “appropriate civil penalty for the wrongdoing.”

Since Bitcoin slid from it’s famed $20,000 peak last December, miners have struggled to stay above water as the combination of low prices and regulatory pressure continues to put a squeeze on the industry.

In June, Canadian provincial utility Hydro-Quebec proposed new rules, under which blockchain companies will be required to bid for electricity and quantify the jobs and investment they expect to generate per megawatt. The new regime seeks to allocate up to 500 megawatts, in addition to 120 megawatts of already existing initiatives.