Regulatory and contractual issues impact Canaan's mining operations
According to Bitcoin.com, Canaan, a top high-performance computing company and mining rig manufacturer, has disclosed setbacks that are expected to affect its Bitcoin mining activities and revenue from Q3 2023 onwards. These hurdles primarily arise from reduced operational hours of their mining devices, coinciding with the company's teaser regarding a "groundbreaking" mining innovation set for a September release.
Canaan has been forced to reduce its mining power by 2 EH/s in Kazakhstan due to regulatory changes since July. This decision accounts for half of their mining power across Central Asia and North America, with a total hashrate of 4 EH/s at the end of Q1 2023.
In the US, Canaan is engaged in a contractual dispute with a hosting partner accused of breaching a joint mining agreement. The company seeks compensation for the alleged mishandling of 13,000 Avalon mining rigs, reimbursement of a $1.25 million deposit, and claimed Bitcoin profits, among other damages. Mediation efforts have failed, leading Canaan to pursue arbitration.
These challenges in Kazakhstan and the US are expected to significantly impact Canaan's mining capacity as Q3 2023 approaches. Despite these headwinds, the firm remains committed to adapting its strategy to mitigate operational obstacles. Canaan's stock recently experienced a downturn, closing a Friday trading session 28% weaker against the US dollar over a month-long period.
