GMO Internet’s Crypto Business Reports $12 Million Loss in 2018

Japanese IT giant GMO Internet has reported an operating loss of 1.36 billion yen, or about $11.75 million, for its cryptocurrency business last year.

Japanese IT giant GMO Internet has reported an operating loss of 1.36 billion yen, or about $11.75 million, for its cryptocurrency business last year.

The firm publishedits financial results for the fiscal year 2018 on Tuesday, saying its overall crypto segment, including exchange and mining businesses, made $74.51 million in net sales for 2018.

While its exchange business achieved profits of almost $7 million over the period, the profitability of GMO’s mining unit continued to decline throughout the year and recorded $18.3 million in total losses. The fourth quarter saw the largest loss in the crypto mining segment, accounting for 60 percent of the year’s drop in mining returns.

Further, GMO indicated that the loss for the year did not include an “extraordinary loss” of 35.3 billion yen (or $319.23 million) in its cryptocurrency mining business, as forecast by the firm in December.

At the time, GMO said it would record an extraordinary loss, consisting of impairment loss and losses from transfers of receivables, as it quit making and selling crypto miners following a year of bearish market conditions.

On Tuesday, GMO also announced a change in policy for its crypto mining business, including relocation to a new mining center. The firm said this was because its mining share did not increase as expected due to the rise of the hashrate, the decline in bitcoin price last year and the purchase of “expensive mining machines from other manufacturers, which led to decreased profitability.”

As such, the company now plans to move to a new, undisclosed region by end of this year, which will be able to provide a less expensive power supply.

“The electricity cost in the new location, which is confidential, is less than half of that in Northern Europe, which is 7-8 cents per kWh including running costs. We believe the relocation will impact our earnings this summer,” GMO said.

Regarding its plans for a yen-pegged stablecoin called GMO Japanese Yen or GYEN, the firm said work is on track and plans a launch later this year in overseas markets.

The firm initially announced the planned stablecoin issuance back in October, in preparation for a move into the blockchain remittance and settlement business.

Yen and bitcoin image via Shutterstock

Related Posts:

  • No Related Posts

Japan Approves 17th Cryptocurrency Exchange – Its First in Over a Year

It has been over a year since Japan’s Financial Services Agency last approved a cryptocurrency exchange to legally operate in the country. Coincheck …
Japan Approves 17th Crypto Exchange – Its First in Over a Year
Exchanges
3 hours ago

|

By

Kevin Helms

|

It has been over a year since Japan’s Financial Services Agency last approved a cryptocurrency exchange to legally operate in the country. Coincheck, which was hacked early last year, has become the 17th fully-registered crypto exchange in the country. The exchange has made numerous improvements after it was acquired by Monex Group.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

FSA Finally Approves Coincheck

Japan Approves 17th Cryptocurrency Exchange – Its First in Over a YearJapan’s top financial regulator, the Financial Services Agency (FSA), announced on Friday that it has approved the registration of Coincheck as a cryptocurrency exchange. Under the country’s Payment Service Act, all crypto exchanges must register with the FSA.

The exchange’s parent company, Monex Group, also issued a press release on Friday with registration details. The announcement reads:

Coincheck Inc … announced today that it has registered with the Kanto Financial Bureau as a cryptocurrency exchange agency in accordance with the Payment Service Act, effective January 11, 2019.

Japan Approves 17th Cryptocurrency Exchange – Its First in Over a YearAccording to the FSA’s website, Coincheck handles nine cryptocurrencies: BTC, ETH, ETC, LSK, FCT, XRP, XEM, LTC, and BCH.

Japan Approves 17th Cryptocurrency Exchange – Its First in Over a YearAfter it was hacked in January last year, Coincheck suspended certain services “to focus on enhancing governance and internal controls by developing business improvement plans and carrying them out,” the company explained. On Nov. 26, services for tradable cryptocurrencies were resumed including depositing, remitting, purchasing and selling.

Coincheck originally applied for registration with the FSA in September 2017. While the regulator approved 16 crypto exchanges throughout that year, it continued to evaluate Coincheck. The exchange was classified as a deemed dealer, which means it was allowed to operate while the FSA reviewed its application.

Needed Improvements Made

Japan Approves 17th Cryptocurrency Exchange – Its First in Over a YearIn Friday’s announcement, Coincheck outlined six areas it had addressed in order to comply with the FSA’s registration requirements. The exchange has “improved governance fundamentally,” “revisited the business strategy and ensured customer protection,” “strengthened governance control by the board,” “clarified risks on cryptocurrencies being offered by the company,” “implemented measures on anti-money laundering (AML) and countering the finance of terrorism (CFT),” and “revised organizational structure to ensure validity.”

Japan Approves 17th Cryptocurrency Exchange – Its First in Over a YearMonex Group made an announcement on Dec. 25, explaining to investors that neither it nor Coincheck offers “cryptocurrency mining-related business including cryptocurrency mining itself.” This clarification followed the announcements by GMO Internet and DMM.com regarding their own mining operations. GMO Internet said it will no longer develop, manufacture, and sell mining machines. DMM.com is reportedly exiting the cryptocurrency mining business altogether.

Furthermore, the company assured investors that it “does not conduct cryptocurrency transactions on its own account,” adding:

Coincheck Inc. does conduct cover transactions with domestic and overseas cryptocurrency exchanges speedily for the positions that resulted from the selling and buying transactions with customers.

The approval of Coincheck comes more than a year after the last cryptocurrency exchange, Bitocean, was approved by the FSA on Dec. 26, 2017. The hack of Coincheck in January prompted the agency to slow down the rate of approvals and began tightening its oversight of crypto exchanges, forcing 13 out of 16 deemed dealers to exit the market. Nonetheless, the FSA told news.Bitcoin.com at the end of last year that more than 190 crypto exchange operators have expressed their intention of market entry.

What do you think of the Japanese regulator finally granting registration to Coincheck? Let us know in the comments section below.


Images courtesy of Shutterstock and Coincheck.


Need to calculate your bitcoin holdings? Check our tools section.

Related Posts:

  • No Related Posts

Challenges Surround GMO Internet’s Cryptocurrency Mining Business

The Bitcoin Cash (BCH), on the other hand, does not appear to be mined by the company in December 2018. The report shows the mining reward …

The cryptocurrency mining business report from GMO Internet released on January 8, 2019, indicates a slight surge in the number of bitcoins mined, but a decrease in profits because of the plummeting price of bitcoin. GMO revealed it didn’t mine Bitcoin Cash in December and will discontinue publishing mining business report from January 2019.

GMO Internet: Waking the Japanese IT Giant

Tokyo-basedGMO internet Inc. was established in 1995. The company develops Internet Infrastructure, Online Advertising & Media, Internet Finance, and Cryptocurrency businesses.

The firm began its in-house mining division in December 2017, in the midst of the bitcoin frenzy and meteoric rally. This division focused on developing, manufacturing, and selling mining hardware, especially mining chips. GMO Internet reported massive profitability from this branch in the initial few quarters.

However, the subsequent fall in the crypto prices not only offset these profits but also resulted in enormous losses.

A Mixed Monthly Report for December 2018

GMO Cryptocurrency Mining Business Income Report.

( Source: GMO)

Advertisement
advertisement

GMO Internet has confirmed a massive decline in its overall mining revenue.

The Bitcoin (BTC) rewards surged from 696 bitcoins in November 2018 to 960 bitcoins in December 2018.

The Bitcoin Cash (BCH), on the other hand, does not appear to be mined by the company in December 2018. The report shows the mining reward from Bitcoin Cash as zero for December 2018 against the 400 in November 2018. It is possible the company has stopped mining BCH entirely due to recent conflicts and fork in the BCH community.

The company is expected to continue its in-house mining operations. The report has pointed out the significance of relatively inexpensive electricity for increasing profit margins. Consequently, decisions are now being taken to relocate the mining centers to achieve this feat.

This monthly report would also be the last one from the company, in accordance with the decision to stop publishing monthly reports from 2019. Overall, the effects of the 2018 crypto bear seem to be still lingering for GMO Internet.

On December 25, 2018, GMO announced its decision to shut down the cryptocurrency mining machines manufacturing business.

The cryptosphere continues to be in the bear market, and the strategies continue to change for big and small companies.

Related Posts:

DMM.Com To Cease Mining Crypto

The company cites declining virtual currency prices and increased … DMM.com had launched its virtual currency division in October 2017 with the …
Nathan GrahamJanuary 2, 2019 9:56 PM
January 2, 2019 9:56 PM
0

Share

Facebook
Twitter
Reddit
LinkedIn
Cancel

The company cites declining virtual currency prices and increased competition as the reasons behind the change.

On December 30, the Japan-based online marketplace DMM.com announced it will cease mining cryptocurrency after just over a year in the business, according to an article in Nikkei. The e-commerce company will reportedly stop mining cryptocurrency due to the recent price slump, which, along with stronger competition, has decreased profitability. DMM.com had launched its virtual currency division in October 2017 with the intention of creating one of the largest mining farms in the world.

Additionally, on December 25, DMM.com Group announced it was canceling the release of its crypto trading app, dubbed Cointap. However, the announcement does state that the DMM group will still offer “virtual currency trading services” on its DMM Bitcoinexchange platform. According to Nikkei, DMM founder Takashi Kameyama stated that he will “work hard” on improving the exchange platform.

Several mining participants in the Japan and Asia cryptospheres have felt the sting of crypto winter. Just last week, Japanese IT company GMO Internet announced it would no longer manufacture or sell mining rigs, citing an “extraordinary loss” to the company’s bottom line. The same day, it was reported that crypto mining giant Bitmain, which is based in China, would be laying off some staff.

Translations by Google.

Nathan Graham

Nathan Graham is a full-time staff writer for ETHNews. He lives in Sparks, Nevada, with his wife, Beth, and dog, Kyia. Nathan has a passion for new technology, grant writing, and short stories. He spends his time rafting the American River, playing video games, and writing.

ETHNews is committed to its Editorial Policy

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest DMM.com, Bitmain or other Ethereum world news.

DMM.com
Bitmain
GMO Internet
Japan
Cointap
cryptocurrency mining
crypto mining

Related Posts:

Japan’s DMM Shuts Down Crypto Mining Business

DMM.com originally announced in September 2017 the establishment of its virtual currency unit and later started its mining operations in Kanazawa in …
Market NewsJanuary 2, 2019 by Kelly Cromley

Another large financial company in Japan seems to leave the cryptocurrency industry. It was GMO Internet last week and this week, e-commerce giant DMM.com reportedly closes its mining business in Kanazawa, Japan.

Local news agencies reported that DMM.com had been leaving the emerging crypto industry on Sunday. Speaking to The Nikkei on Monday, the founder of the mining business of DMM.com, Keishi Kameyama said that he would work hard on “[ the] exchange[ business] and blockchains.”

The exchange business he is referring to is DMM Bitcoin, a group subsidiary that is one of the 16 regulated cryptocurrency exchanges in Japan. Before Kameyama spoke to The Nikkei on 30 December 2018, Toyo Keizai quoted the company as saying that “profitability deterioration is the main cause” for the company closing its business.

The company said that the security concerns of virtual currency mining had been underestimated. The official statement is as follows:

“I would like users to experience the extraordinary mining site in their lives. From such thought DMM opened a part of the [mining] farm to the public, but this was canceled in early June. It is because it is judged that ensuring security is difficult. Overseas, theft of virtual currency mining machines has been steady, and [there were attempts] even at the DMM’s Kanazawa farm.”

DMM founder Keishi Kameyama said recently that he intends to concentrate on the exchange business and the blockchain. The report from the outlet further elaborated that the process of withdrawal, which includes the sale of its machines, will be carried over to the first half of 2019.

DMM.com originally announced in September 2017 the establishment of its virtual currency unit and later started its mining operations in Kanazawa in October, where the company mined several cryptocurrencies. Last week alone, the company was already hesitant about the crypto industry, with DMM.com revealing that its Cointap crypto-trading app would not be launched as planned.

According to Toyo Keizai, DMM.com does not believe that it is the right time to attract unexperienced virtual currency traders thanks to the current bear market and the large hack of Coincheck that occurred in early 2018.

The departure of DMM.com from the crypto mining business is followed by the announcement by the Japanese IT giant GMO Internet that it will pull the plug on its mining operations. The company stated last week in a regulatory report that, as cryptocurrency prices continue to decline, the profitability of its cryptocurrency-focused mining chips reflects the same trend.

GMO Internet said “the environment is increasingly competitive because of the decreased demand mainly due to the decline in the cryptocurrency price, the decline in the sales price, etc.”

Related Posts:

  • No Related Posts