Argo Blockchain is at risk of shutting down if it fails to raise additional funding

by Arthur · October 31, 2022

London Stock Exchange-listed cryptocurrency firm Argo Blockchain has warned that it is at risk of ceasing operations due to a lack of funding.

Crypto mining company Argo Blockchain continues to explore new funding opportunities after failing to raise large capital from a strategic investor, according to an announcement on October 31.

Argo has sought to raise around 24 million British pounds ($27 million) via the subscription of ordinary shares. “The company no longer believes that this subscription will be completed under the previously announced terms,” Argo said in a statement.

While Argo is exploring other financing options, there can be no assurance that it will sign any definitive agreements or complete any agreements. The firm will continue to work to obtain sufficient capital for at least the next 12 months from the announcement date, Argo noted.

Argo will have to cut or suspend operations if it is unable to raise capital during this period, the firm noted, stating:

“Should Argo not be successful in completing additional financing, Argo will become cash flow negative in the short term and have to curtail or cease operations.”

Amid the lack of funding, Argo has taken measures to preserve cash and optimize liquidity. The company sold 3,843 brand new Bitmain S19J Pro miners for $5.6 million, which was the last batch of the original Bitmain order scheduled for installation in October 2022. Argo’s total hashrate capacity remained at 2.5 exahashes per second.

Related: Bitcoin miners are rethinking business strategies for long-term survival

In the past, Argo has also actively sold its mined Bitcoin (BTC) holdings to cut debt to Michael Novogratz’s crypto investment company Galaxy Digital. In July, Argo sold an additional 887 BTC after disposing of 637 BTC in June 2022. In doing so, Argo became one of many cryptominers that chose to sell self-mined BTC in the midst of the 2022 bear market, including Bitfarms, Core Scientific and Riot Blockchain.

Argo is not the only crypto mining company that has struggled to continue operating amid the ongoing bear market. On October 26, Bitcoin miner Core Scientific filed forms with the United States Securities and Exchange Commission, warning of potential bankruptcy proceedings. The firm cited unfortunate industry events such as low BTC prices, increased electricity costs and other issues.