Bitmain, a Bitcoin mining ASIC manufacturer, couldn’t pay salaries for September and October due to rising hash rates and insufficient Bitcoin prices, leading to production halts in many mining facilities.

What’s the Situation at Bitmain?

News sources report that multiple Bitmain employees have provided information on the issue. Allegedly, the company has reduced bonuses, incentives, and unpaid salaries since September. Furthermore, employees are experiencing a 50% salary reduction as per their contracts. Company officials have also communicated with their employees regarding this matter.

“The company, particularly in new ASIC orders for September, has not achieved a positive cash flow. As a result, the senior management team has opted to postpone September salary payments for review after the holidays, commencing on October 7th.”

Founded in Beijing, China in 2013, Bitmain once dominated with a 70% market share, ranking among the world’s largest ASIC manufacturers. The Antminer ASIC series, a favored product, remains a leader in Bitcoin mining hash rate calculations.

In August, Hive, a Bitcoin mining company, revealed its acquisition of 2,000 Bitmain S19 XP ASICs for integration into its systems. These units, priced at $4,653 by Bitmain, were expected to generate $80 in revenue per megawatt-hour once integrated into Hive’s entire system.

Not the Company’s First Crisis

Bitmain’s first crisis unfolded in 2021, stemming from a year-long ownership dispute between co-founders Jihan Wu and Micree Zhan. This dispute was eventually resolved, with Wu resigning from his roles as chairman of the board and CEO and selling his company shares to Zhan for $600 million. Following these events, Bitmain had ambitions to go public by the end of 2022, with expectations of generating $5 billion in revenue through the process. Unfortunately, these plans unraveled due to the persistent bear market conditions during that period.