Leading cloud-based cryptocurrency mining services provider HashFlare, has announced that it is ending its Bitcoin mining services effective immediately, citing the lack of financial returns for users under contract to use said services.
In an official statement sent via email to its users, HashFlare explained that the decline of the cryptocurrency market in general has affected the operation of their services. Notably, the declining prices of bitcoin has rendered bitcoin mining unprofitable for many due to the cost of electricity and other expensive business overhead costs.
Bye-Bye Bitcoin Mining
As a result, users under HashFlare’s SHA-256 cloud-mining contracts were receiving earnings payouts that were lower than the maintenance fees they were paying. After 28 consecutive days of zero accruals, HashFlare was “forced to start disabling SHA hardware” and “stop the mining service of active SHA-256 contracts in accordance with clause 5.5 of our Terms of Service.”
HashFlare had the following message for customers affected by the shutdown:
“We have made every possible effort in order to resolve the problem that has arisen – for instance, we have considered a variety of technical solutions, which would have allowed us to lower expenses related to maintenance and electricity. However, due to the general instability of the market, the actions we have taken could not significantly influence the current situation.”
Affected users are unfortunately left with little option to continue using HashFlare to mine bitcoin. At the time of this writing, HashFlare plans to continue offering services for Scrypt (Litecoin), ETHHash (Ethereum), EquiHash (ZCash), and X11 (Dash) algorithm mining.’
HashFlare Adds KYC Verification
For users who opt to continue using HashFlare, the firm now requires an identity verification step. HashFlare added the KYC/AML requirement as of July 19. Verified users will get the benefit of increased daily and monthly withdrawal limits, as a way to incentivize users to verify their identity.
More service providers that offer access to cryptocurrencies, such as LocalBitcoins, have begun requiring an identification step as government regulators look more closely at know-your-customer and anti-money laundering standards and enforcement to prevent cyber-crime and tax evasion related to cryptocurrencies.