Company overview

Bgin Blockchain Limited runs its own mining machines at farms in Nebraska, earning cryptocurrency rewards that it converts into cash to fund operations. Almost all of its mining revenue comes from KAS. It typically exchanges mined coins for Tether (USDT), then converts USDT into conventional currency. It used Kraken alone for the first conversion step in its latest fiscal year. A substantial share of company revenue also comes from mining through a third-party pool associated with one unnamed Hong Kong customer.

The company also sells machines it designs to mining businesses, distributors and individual miners through iceriver.io. Customers place orders, and Bgin then commissions outside manufacturers to assemble the machines. Sales now contribute less revenue than self-mining, and most machine sales are for ALEO mining. Customers can also pay Bgin to install and operate their machines at its farms. Its separate mining-pool service retains part of participants’ coin rewards as fees, but the company is winding down that business.

Mining returns depend on coin prices covering electricity and equipment costs, as well as how difficult it is to earn rewards on the network. Lower KAS prices have made most of Bgin’s owned machines uneconomical to run, leaving them idle. Both its mining operations and machine sales depend on outside component suppliers, including a single foundry that makes its self-designed mining chips.

China’s restrictions on cryptocurrency mining prompted Bgin to relocate mining operations to the United States. Its choice of coins also has legal limits: if relevant crypto assets are classified as securities and Bgin falls under U.S. investment-company rules, it could have to register, restructure or cease almost all business.