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Argo Blockchain, a London Stock Exchange-listed cryptocurrency company, has warned that it risks shutting down operations due to lack of funds.
Cryptocurrency mining company Argo Blockchain Continue The company announced on October 31 that it will seek new funding opportunities after failing to raise major funding from strategic investors.
Argo is looking to raise approximately 24m ($27m) through an ordinary share subscription. “The company no longer believes that this subscription will be completed under its previously announced terms,” Argo said in a statement.
Argo is exploring other financing options, but there is no guarantee that a definitive agreement will be signed or the transaction will be completed. Argo says it will continue its efforts to secure adequate capital for at least the next 12 months from the date of the announcement.
Argo will have to scale back or even cease operations in case it fails to raise funds during this period, the company said.
If Algo is unable to complete further funding, Algo will be cash flow negative in the near term and will be required to wind down or cease operations.
In the face of cash shortages, Argo is taking steps to preserve cash and optimize liquidity. The company sold his 3,843 new Bitmain S19J Pro miners for his $5.6 million. This was the last batch of the first Bitmain order scheduled for installation in October 2022. Argo’s total hash rate capacity remained at 2.5 exahashes per second.
Related: Bitcoin miners rethink business strategy to survive in the long run
Previously, Argo had aggressively sold its mined Bitcoin (BTC) holdings to reduce Michael Novogratz’s debt to crypto investment firm Galaxy Digital. After selling 637 BTC in June 2022, Argo sold another 887 BTC in July. With this, Argo will be able to invest in Bitfarms, the Core scientific and riot blockchains.
Argo is not the only crypto mining company struggling to stay in business amid the ongoing bear market. On October 26, Bitcoin miner Core Scientific filed a form with the U.S. Securities and Exchange Commission warning of possible bankruptcy proceedings. The company cites unfortunate industry events such as falling BTC prices, rising electricity prices, and other issues.
