Last updated on January 12th, 2015 at 04:00 pm
Just a few short months ago CEX.IO was the largest cloud mining service in the world.
Flash forward a few short months as the value of bitcoin has fallen and the costs of running mining equipment have remained the same and we see CEX.IO in serious financial trouble and suspending operations.
In a blog post a company spokesperson Alex Kerya stated:
Taking into consideration our users’ interests, the recent Bitcoin price drop, as well as the upscaling of the mining difficulty, CEX.IO Bitcoin Exchange would like to announce a temporary suspension of cloud mining services provided by the platform at the time of the next difficulty increase.
“Mining with using User’s Gigahashes can be stopped by CEX.IO if the amount of the Maintenance Cost exceeds rewards for each mined block or if the mining is economically inexpedient.”
Thereby, all GHS formerly purchased by CEX.IO users remain their absolute property, with appropriate figures reflected in users’ profile balance. Additionally users will be able to manually enable mining with Gigahashes by their own choice.
“Suspension of CEX.IO cloud mining service is only a forced temporary measure, the result of cloud mining costs exceeding mining profit,”Jeffrey Smith, Chief Information Officer of CEX.IO. “Currently all cloud mining/maintenance costs are directed to the Hardware provider, hence, we are open for negotiations with additional mining hardware providers, who can offer favourable terms. And, as soon as we get an opportunity to upgrade mining hardware, or come to more efficient terms with energy suppliers, cloud mining process will be automatically resumed.”
Meanwhile, CEX.IO will continue operating as full service exchange platform for trading cryptocurrencies and fiat money.
The company has stated that the suspension is only temporary but given the recent events around the cloud mining space many will be surprised if the company makes a come-back.