DigitalBTC Dissolves Supply Agreement with CloudHashing

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DigitalBTC Dissolves Supply Agreement with CloudHashing

A leading Bitcoin company in Australia, DigitalBTC says that it has dissolved a supply agreement with cloud mining service CloudHashing. The agreement according to the company was signed in March wherein CloudHashing was to run DigitalBTC hardware in data centers in Iceland and Texas to mine Bitcoin.

The abrupt decision from the company according to a source has been communicated to the Australian Securities Exchange (ASX) wherein it states that the two companies agree to dissolve the supply deal. DigitalBTC informs that under the settlement, CloudHashing’s shares in it are to be cancelled. The decision was taken unanimously by the management board of the company.

According to the announcement from DigitalBTC, “The settlement agreement stipulates that 8,276,465 ordinary shares in the company (4.9% of the issued capital) are to be cancelled for nil consideration, delivering a net benefit to all remaining shareholders by reducing the total number of ordinary shares on issue.”

The company further informs media that in addition, 3,742,520 Performance Rights issued to CloudHashing under the previous supply agreement are to be cancelled as well. Like DigitalBTC, CloudHashing too informed its customers about the buyback plan in an email sent on 29th January wherein it elaborated the issue.

CloudHashing says, “We have some important information for you about your CloudHashing service. Please visit [our website] and login to view your account message. For a limited period only CloudHashing is offering to purchase your Bitcoin mining contract. This offer expires in 10 days. Please log into your account to view this offer.”

The Partnership that could not be worked out

The latest update is that when the customers log in they are presented with a choice of keeping their contracts with an increased management fees, or selling them back to the company. On the other hand, DigitalBTC’s management board unanimously recommended that all shareholder vote in favor of the proposal.

Their decision was inspired from the fact that it would deliver an increase in value per share for remaining shareholders. The company made it clear that the buyback will not require any payments on to CloudHashing. Also, it had managed mining operations without any input from CloudHashing from mid-2014.

DigitalBTC clarified that it has not used CloudHashing for over six months, it’s just taken time to settle the agreement. The company had no choice but to terminate the partnership as key outcomes from the strategic agreement in March 2014 did not eventuate.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com