Uncertainty Builds as Alpha Technology Misses Another Shipping Deadline

Dec 10, 2014 at 20:30 UTC
Updated Dec 12, 2014 at 13:48 UTC
NEWS
Photo of Alpha Technology office with metal shutters rolled down.

A photograph of Alpha Technology’s registered business address in Manchester taken on 10th December 2014. Source: Bicycle Doctor

British mining equipment maker Alpha Technology has been investigated by police in Manchester, following complaints lodged against it with the national fraud and cybercrime centre, ActionFraud.

The centre, which is run by the City of London Police, said it has received 20 reports against Manchester-based Alpha Technology. Those reports were assessed by the national fraud intelligence unit and passed on to Greater Manchester Police (GMP).

The Economic Crime Unit there told CoinDesk it has looked into Alpha Technology and that its investigations are now complete. The GMP did not elaborate on what actions were taken during the investigation.

“We have previously looked into the company,” a Manchester police press officer said. “GMP’s investigations are now complete in respect of this matter. If further information comes to light that would require our attention then we could and may well have a further look at the operations of the company.”

ActionFraud recommended that anyone suspecting they were a victim of fraud, should make a complaint to the GMP.

Alpha says no contact with police

According to Mohammed Akram, Alpha Technology’s chief executive and founder, no one at his company has been contacted by the police or the fraud intelligence unit.

Akram defended his company, which took deposits for its miners in January, but has missed all its delivery deadlines so far.

He said:

“Any investigation would show a full paper trail where everything is as clean as a whistle. Any delays were out of our control due to many technical and market reasons.”

He claimed that Alpha has received more than £200,000 in refunds for value-added tax (VAT) paid from the UK’s tax authority. He pointed to this as evidence that his firm is engaged in a legitimate enterprise because the refunds are only issued after checks by the tax authority.

Companies registered to charge VAT in the UK are eligible for a refund on the tax for business purchases. Claims for refunds are then submitted to automated checks, which can lead to an investigation by VAT operations staff. A check with the VAT Information Exchange maintained by the European Commission shows that Alpha Technology is VAT-registered in the UK.

It’s unclear how much money Alpha has received in pre-orders, although the amount could reach into the millions of pounds.

A crowd-sourced list of deposits paid to Alpha shows that the firm took £496,560 in pre-payments for 482 units. But Akram said that his firm received orders for “over a thousand units”.

Alpha charged a 30% deposit of £405 or £1,635 for the two types of miners it sells, meaning it could have received deposits worth more than £1.63m.

The two Viper units were available in five or 25 megahashes-per-second speeds. Alpha later announced it was improving its units so they would ship 10 times faster.

History of broken promises

Alpha Technology began taking pre-orders for its miners in January, promising delivery in July. Delivery was postponed to September because the company had problems accessing customer funds on PayPal, Akram said.

In September, Akram said that delivery would be delayed by a month, citing quality-control tests as the reason for the delay.

When October ended without a delivery, he updated his company’s blog to say that a new shipping date would be announced soon. In an email to CoinDesk at the end of November, he said the new shipping date would be in December.

He wrote:

“We anticipate to deliver by December, work is still being done.”

Alpha’s miners are being developed by a firm called Dexcel Designs, which has offices in India and Singapore. Dexcel’s chief executive, Amit Sinha, said they are still involved in developing Alpha’s products.

Sinha said in mid-November that the ‘Viper’ chip, which is meant to power Alpha’s miners, was “working fine”. He said “testing and characterisation” of the silicon was underway. Characterisation of silicon is the process of determining the electrical and other properties of a given chip. Sinha did not respond to a request for videos or images of the testing process.

After that process was complete, Dexcel would begin developing prototypes and embark on mass production, Sinha said.

Akram has posted photographs claiming to show the Viper chip in development on the Alpha Technology blog.

Use the interactive timeline below to view Alpha Technology’s delivery delays.

Legal action in the offing?

Despite Akram’s latest assurances, further action against Alpha Technology may be coming. An attorney who is gathering material for a class action against Swedish firm KnCMiner, Charlotte Lin, said her firm is also launching an investigation against Alpha. She did not provide further details on the investigation.

A law firm in the UK, Selachii LLP, said it had received “many enquiries” on taking legal action against Alpha, but none of the enquirers have engaged the firm, said Richard Howlett, a partner at Selachii.

Howlett said:

“We have had many inquiries from prospective clients but none have wished to proceed to taking action against [Alpha Technology]. We do feel that all people who have paid monies to Alpha have a claim as it appears that something untoward has occurred.”

Customers who have been waiting nearly a year for their miners from Alpha are unlikely to find succour in Akram’s latest assurances. Many customers appear to be still actively pursuing a refund or delivery from the firm.

A messageboard called ‘Fight Alpha Technology Scam‘ has been set up, filled with posts containing advice on how to take action against Alpha, including instructions on how to report the firm to UK authorities. Some posters there say they have received refunds for payments made to Alpha by PayPal.

Another missed deadline

Other customers have taken to visiting Alpha’s registered address at 66 Dickenson Road in Manchester. Staff at the Bicycle Doctor, which is located two doors away, say they have been surprised to see people driving up to photograph the exterior of Alpha’s premises. The photo accompanying this post, of Alpha’s office showing metal shutters rolled shut over its entrance, was taken on 10th December.

Bicycle Doctor staff also say they have received several phone calls from Alpha customers seeking information on their neighbour. The cycle shop has been at its Dickenson Road location for 30 years.

“There was coming and going by a handful of young-looking lads,” said a staffer at the cycle shop, who didn’t wish to be named. “They did seem to set up in the premises that is just next door to us. The front room wasn’t occupied by the looks of it. There hasn’t been coming and going for awhile, a few months.”

The man at the heart of the matter has been elusive. Akram responded to several emails and agreed to a phone interview with CoinDesk scheduled for 8th December. As the date drew near however, he did not respond to requests for a time and phone number to call. The appointed date came and went with no word from Akram despite repeated requests.

In one of his earlier email responses to CoinDesk, Akram continued to defend his company’s missed shipping deadlines.

He wrote:

“Shipping late due to factors out of our control does not mean we are a fraud. Fraud is a huge accusation.”

Featured image by Bicycle Doctor. 

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