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March 13, 2024
Chinese company sold at 10% of value after secretly mining cryptocurrency
It has been reported by 8BTC that a Chinese construction company, Huatie HengAn, has just been sold at less than 10% of its value. This comes after the company apparently switched from construction to mining cryptocurrency in secret, according to certain financial documents.
The company was valued at $25 million just 1 year ago, but was recently sold for just $2 million. It seems that despite originally being a construction company, at some point the firm switched to mining cryptocurrency.
The evidence for this comes from financial records that show the company purchasing 36,500 units of “servers” in 2018 from known crypto hardware manufacturers Avalon and Ebang. These companies do not, in fact, make servers.
It isn't hard to put together what must have happened. It is presumable that much of the company's money was spent setting up a mining operation, sometime during the 2018 season. Anybody who was around last year knows how bad the market got, so it is likely that there was a pretty negative return on that investment, prompting the sale and the very low price.
Not all details have emerged, so it is possible the story is not as it seems, but this could be another cautionary tale of over-investing into a market you do not fully understand.
