Many mining firms, such as Argo Blockchain, have felt the impact of the decline in bitcoin prices. For some firms, their rigs could not cover their loan collaterals. So it’s not surprising that mining firms might feel the impact of last year’s revenue loss in 2023.
The bitcoin bear market was relentless in 2022, driving many crypto institutions to bankruptcy. Crypto mining profitability fell within this period, and the hashrate and mining difficulty also increased, making the process more difficult.
In a recent development, Argo Blockchain, a leading cryptocurrency miner, has announced the departure of CEO Peter Wall from his official role. This announcement comes barely a week after the resignation of former CFO Alex Appleton.
The History Of Argo Blockchain Problems
Argo Blockchain felt the effect of the 2022 bear market, losing more than 50% of its stock prices after reporting a negative cash flow. The company also suffered declining productivity caused by a snow blizzard in December 2022. As a result, Argo Blockchain mined only 147 BTC in December, a 25% decline from November’s output of 198 BTC.
Argo suspended its trading activities on the Nasdaq Global Select Market on December 27, 2022. The company stated that the suspension was to assess vital data concerning its financial performance.
These financial problems drove its debt to nearly $80 million, creating a financial emergency. As a result, Argo finally opted to sell its Helios facility to Galaxy Digital for $65 million. This move reduced the overall debt, protecting the company from filing for bankruptcy protection.
Bitcoin Miner Argo Blockchain Sells Its Helios Facility For $65M #Bitcoin pic.twitter.com/XVjtCqjK2C
— Eduardo Pinto | Crypto Trader (@EduaPintMans) December 28, 2022
Peter Wall released a video explaining why Helios must be sold. According to Wall, the sale will reduce the total debt by $41 million, improve liquidity, simplify the operating structure, and allow mining to continue. This move prevented the company from going bankrupt and dealing with a scenario similar to the FTX saga in 2022.
However, in January 2023, Argo was slammed with a class action lawsuit by some of its investors. This lawsuit stated that the firm reported false statements and omitted vital information on its capacity constraints and hidden costs. According to the lawsuit, these omissions and wrongful acts translated into losses for investors. These events have climaxed into the spate of resignations in February 2023.
Key Players Quit From Argo
Argo announced on February 1 that Alex Appleton, former CFO of the Argo Blockchain, has resigned. According to the post, he would focus on other opportunities that do not relate to the crypto-mining sector. The news received mixed reactions, with some users expressing relief that Alex will no longer be at the helm of affairs.
Also, Sarah Gow resigned from her position; as a non-executive director of Argo’s board. According to the reports, the resignation was based on health reasons. However, the board thanked her for her immense contributions since joining the board in July 2021.
Peter Wall, the former CEO of Argo Blockchain, is the latest executive to resign. The company announced his departure after three years of service. Wall expressed his gratitude to the company for providing him with an interesting journey and recalled the success of the Galaxy deal.
Seif El-Bakly was appointed as the interim CEO. In addition, Matthew Shaw was selected as Chairman of the Board. According to Shaw, Peter built a strong foundation for Argo, a company full of talented people focused on delivering profitable growth.
Featured image from Pixabay l ELG21, chart from TradingView.com