CoinTerra Silent Amid Alleged Cloud Mining Payout Freeze
Amid reports that cloud mining payouts have ceased, signs have emerged that bitcoin mining firm CoinTerra is experiencing debt problems.
Bitcoin mining hardware firm CoinTerra has been the subject of speculation this week, as emails purportedly sent by the company to customers of its cloud mining service suggest the firm has defaulted on debt obligations.
The email, signed by a representative of the CoinTerra support staff, claims that the firm is no longer capable of making payouts to customers.
The message reads:
CoinDesk contacted several members of CoinTerra’s staff, including treasurer Pradeep Kumar Cheruvathoor and PR representative Daniel Larsson, but no official confirmation on either the default or the payout stoppages has been received.
What we know
Email headers from two of the messages purportedly from CoinTerra are consistent and both show that they were sent from CoinTerra’s support account at ZenDesk.
Notably, CoinTerra’s website is operational despite the reported service disruption. While cloud mining products are currently listed as "out of stock", CoinDesk was able to move a hardware purchase to checkout.
CoinTerra has experienced service problems in the past, including performance issues and security incidents, and has faced scrutiny from both customers and third-party organizations like the US Better Business Bureau. The company has also faced legal hurdles, including a class-action lawsuit earlier this year.
What we don’t know
The email shared by both Reddit users and community members is currently unconfirmed by CoinTerra.
The reported payout stoppages are said to have begun in the last weeks of December, though the exact nature of the interruption is not known at this time. One Redditor claimed to have received a payout on 19th December, while a CoinDesk reader reported that he hasn't been issued payment since the 20th.
The email text states that CoinTerra has defaulted on its “secured notes”, a form of debt. The note-holders, according to the email, have a claim on the firm’s assets because of the default, including its miners and server space.
The email further claims that until a decision has been reached among those who own the company’s debt, no payouts will be processed, adding:
More information on the company can be found here.
Additional reporting provided by Stan Higgins
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.