Riot Blockchain is worried COVID-19 may “seriously disrupt” its bitcoin (BTC) mining operations.
The Nasdaq-listed rig builder revealed its concerns in its annual 10-K report with the Securities and Exchange Commission, filed Wednesday. Such reports always include a “general risks” section detailing worst-case business scenarios. This year, Riot added two pandemic-specific subsections to discuss COVID-19.
Riot Blockchain is getting thrashed by the response to COVID-19, the general risk section shows. Its workers are being quarantined and going into self-isolation while its supply chain is seizing up under border restrictions and factory closures, according to the filing.
It also has the unwanted label of being a “nonessential business.” According to the 10-K, Riot has not been classified as an essential business in any of “the jurisdictions that have decided that issue to date.” That potentially cuts off access to Riot’s offices and mining rigs.
“If we are unable to effectively service our miners, our ability to mine bitcoin will be adversely affected as miners go offline,” Riot wrote.
Riot’s concerns echo issues Chinese mining farms faced nearly two months ago. In early February, PandaMiner Chief Operating Officer Abe Yang told CoinDesk his company had difficulty operating some of its farms due to quarantine controls in certain provinces because they had limited staff repairing machines and running the hardware.
At present, Riot’s Oklahoma City operation features 4,000 Bitmain S17 Pro Antminers purchased over December 2019 for $6.35 million total, according to two press releases issued at the time. Those rigs replaced Riot’s older fleet of about 8,000 S9 models, now offline, the 10-K shows.
The “catastrophic” business ramifications of COVID-19 are hardly unique to Riot Blockchain; nearly every business is facing an existential threat that only four months ago would have sounded absurd.
It’s an open question where all this will lead. Riot admits that the pandemic’s “sweeping nature” makes it next to impossible to predict the long term impact. One thing is certain, though:
“If not resolved quickly, the impact of the novel coronavirus (COVID-19) global pandemic could have a material adverse effect on our business.”