John McAfee’s MGT Capital Investments (OTC: MGTI) and one of the leading bitcoin mining hardware manufacturers, Bitmain Technologies, have recently announced a joint venture focused on the creation of the premier North American bitcoin mining pool and cloud mining facilities.
The purpose of the joint venture is “to offer both institutional and individuals access to affordably priced mining hash from U.S. based facilities maintained by MGT,” the announcement stated. Bitmain already offers the leading Chinese mining pool and cloud mining service, but the partnership’s product would spawn products for the American markets.
"Our partnership with an iconic name such as Bitmain Technologies is a major milestone for MGT as it executes its plan to become the major player in bitcoin throughout the western hemisphere."
- John McAfee, Executive Chairman of MGT
In May, McAfee was chosen to helm the New York Stock Exchange (NYSE) publicly-traded company as their new CEO. The anti-virus mogul and outspoken libertarian quickly appointed several hacking and bitcoin experts to his board of directors, including Roger Ver, Erik Vorhees, and Bruce Fenton.
Soon afterward, McAfee announced that his company would be building a world-class bitcoin mining operation in Washington state, using a nearby hydroelectric dam to inexpensively generate the electricity and cool the mining equipment.
Since that time, the Washington State bitcoin mining facility has been among the top bitcoin producers in the U.S. already, generating over $50,000 per month in gross profit, according to the company.
This amount doesn’t make MGT profitable yet, but it does offset the $300,000 monthly operating costs for the company, and help establish MGT Capital as an experienced leader in the cryptocurrency mining and security space.
Earlier this month, the company revealed the upcoming product release of Sentinel, an enterprise-grade anti-hacking tool that alerts system administrators to hacking attempts on their networks in real time. The product, which is licensed for $4,995 per year, will be the company’s primary income earner and is slated for launch in “six to eight weeks.”
"The cash flow opportunity in the Bitcoin market provides tremendous financial benefit to our operations and balance sheet. At our current output, we believe MGT is one of the top five Bitcoin miners in the U.S., and we believe our first quarter 2017 goal of 10 PetaHash for this facility would place MGT in a leadership position in the global Bitcoin network.”
- John McAfee
Venture partner Bitmain has its own bitcoin mining pool, Antpool, that is currently the world’s largest mining pool in terms of hashrate distribution and responsible for about 18 percent of the worldwide bitcoin mining power.
7 day hashrate distribution amongst the largest mining pools - Smartbit.com.au
Instead of having his mining power join Antpool, further centralizing the bitcoin hashrate into one larger pool, McAfee has announced the creation of McAfee pool, which will feature an “advanced user interface” as well as “superior network protection.”
Shortly after announcing their 90 bitcoin payday, the U.S. Securities and Exchange Commission (SEC) subpoenaed MGT Capital, sending their stock price plummeting. McAfee said at the time that MGT will be cooperating with the SEC, turning over requested documents, but he does not believe MGT will be subject to any enforcement proceedings.
On the 19th of this month, MGT Capital received a letter from the NYSE stating that the company’s common stock is being delisted. NYSE Regulation cited Section 1002(c) of the NYSE MKT Company Guide as the reason for their action.
According to the SEC, Section 1002(c) states that the exchange has the right to consider suspension or removal of any securities that, in their own opinion, “the issuer has sold or otherwise disposed of its principal operating assets, or has ceased to be an operating company.”
Following the NYSE's letter, MGT Capital issued a press release commenting on the decision. “It is the Company's position that the facts dramatically contradict the Exchange's decision,” the announcement reads.
“The Company has not sold or disposed of its principal operating assets,” according to their announcement. In addition, “the Company knows of no facts or circumstances that would lead NYSE Regulation to reach its unilateral decision,” McAfee responded.
"In our opinion, the conclusions of NYSE MKT are not only wrong and unfair, but insulting. Furthermore, this regulatory standard appears to be applied arbitrarily when comparing MGT to other issuers, or even to MGT itself over the years."
Stockholders still possess the full value of their investments, McAfee assured investors in his latest stockholder report. The shares will now trade on the Over the Counter (OTC) market temporarily. “We expect the Company's stock to begin trading over the counter under the ticker symbol "MGTI" beginning today, October 20, 2016,” he revealed. Even still, a class-action lawsuit has emerged in the state of New York.
MGT does have the right to a review by a committee of the NYSE Board of Directors and possibly an appeal regarding the delisting decision. However, McAfee stated in the announcement that “The Company has not yet decided whether it will appeal the NYSE ruling.” He added that the company currently has a listing application in process at competing stock exchange NASDAQ, as well as the OTCQX. “There can be no assurance of acceptance or timing," concluded McAfee.
On November 6, McAfee will be giving the keynote address at the 5th ‘Blockchain: Money’ conference in London. The event, which will feature over 150 speakers in the bitcoin and blockchain space, is planned to focus on emerging FinTech markets, cryptocurrency initiatives, blockchain industry growth, and real-world use cases of blockchain technology.
"The Blockchain will be central to nearly every aspect of cybersecurity, from wire transfers, to send and receive authentication, to secure voting systems. It will become the cornerstone of virtually all digital transactions,"
Beijing-based Bitmain Technologies was founded in 2013 and has offices in Amsterdam, Hong Kong, Tel Aviv, Qingdao, Chengdu and Shenzhen. The company has gradually grown to become one of the world’s most valuable bitcoin companies.
For several product lines now, Bitmain has consistently produced the most energy-efficient bitcoin miners available, and today’s Antminer S9 is the first ASIC chip to be fabricated with a 16-nanometer process.
After making several investments in other bitcoin companies, Bitmain has started branching out operations into related verticals as well. Top bitcoin mining pool Antpool is maintained by the company, as well as one of the largest cloud mining operations, subsidiary Hashnest.
“Our machines and customers are present in multiple locations in almost every country of the world,”