Customers fuming as Pompliano-backed ‘Coinmine’ collapses

Crypto winter has claimed a significant victim, with prominent mining company ‘Coinmine’ announcing it’s shutting down.

Coinmine was established four years ago with significant backing from some of crypto’s biggest names, including Anthony Pompliano, Balaji Srinivasan, Michael Arrington and Coinbase ventures.

The company sold crypto mining devices at a relatively low cost, allowing everyday people to collect some of their favourite cryptocurrencies.

Screen Shot 2022 09 13 at 11.38.27 am Coinmine
A Coinmine (Picture: coinmine.com)

The shutdown means those miners will no longer function, making them worth nothing more than the sum of their parts.

“We have come to the end of our journey,” Coinmine told its customers.

“On Thursday September, 15, 2022, Coinmine services will discontinue. The exact timing will be in conjuction with Ethereum’s network upgrade.

“Your Coinmine will cease mining but the crypto you have accrued so far will be available to you.”

The company has suggested Coinmine owners now open their device and use the parts for a new miner, or alternatively sell it to someone else.

“Whatever you choose to do, you’ve been a part of keeping crypto alive and we’ve been honored to be a part of that with you,” Coinmine said.

Coinmine collapse letter
The letter from Coinmine to its customers.

Coinmine customers react

Entrepreneur Adam Nash says he bought a Coinmine to teach his children about crypto, but is not sure if it was a profitable investment.

“(We) ended up with about $2k+ worth of crypto for a $700 box, (but) still not sure if we broke even, net of electricity costs,” he said.

One customer Tweeted that he would have needed another five years to break even.

Asia Markets has spoken to another Coinmine owner, who says he can’t help but feel ripped off.

“I assumed that once I purchased the device, I’d be able to use it forever. This has come as a shock,” he said.

“I have no idea how to use the parts to make another miner and I wouldn’t know how to find someone to sell it to.”

Investors quiet

Investor Anthony Pompliano has removed any reference to crypto from his Twitter profile and is yet to comment on the demise of Coinmine.

Asia Markets is unaware of any comment being made from any individual involved in the company at this stage.

Screen Shot 2022 09 13 at 11.27.10 am Coinmine
Crypto investor Balaji Srinivasan, who previously worked at Coinbase.

Crypto winter

The collapse of Coinmine comes a month after Asia Markets revealed the crypto exchange founded by Cameron and Tyler Winklevoss was significantly increasing its custody fees.

The decision followed reports of major staff cuts at the company.

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