SOS Beats Q1 Crypto Mining Operation Target, Progresses in US Market Entry Move

One of China’s newest crypto mining players, SOS Limited, continues its inroad into the US market after a fraud allegation episode with the news of surpassing its projected mining operations target for Q1 2021.  The emerging blockchain-based and big data-driven marketing solution provider states it has generated 42 Bitcoins and 916 ETH in Q1 even as it received its previously announced third batch of 5464 cryptocurrency mining rigs which could increase the output of its combined pool of rigs to about 177 Peta-Hashes per second (PH/s) for mining Bitcoin and 356 Giga-Hashes per second (GH/s) for Ethereum over time. 

Unlike China’s Canaan which released its unaudited financial results for the three months and twelve months ended December 31, 2020 and got a backlash from the market, SOS Limited has been tipped to become the biggest player in the crypto mining world. Canaan’s shares crashed shortly after releasing its books on Monday going down by about 28% as record shows the Chinese crypto mining equipment company had virtually nothing to show for its Q4 2020.

It had a year-over-year decrease of 93.1% computing power – 0.2 million Thash/s compared to 2.9 million Thash/s in the same period of 2019 and its total net revenues decreased to RMB38.2 million (US$5.9 million) from RMB463.2 million in the same period of 2019. Gross profit was US$1.4 million and net loss narrowed to RMB72.0 million from RMB798.2 million in 2019.

Nangeng Zhang, Canaan CEO, attributes the supply chain disruptions that negatively impacted their revenues to the outbreak of COVID-19 though the company’s CFO, Tong He, notes that the disruptions which coincided with a Bitcoin price rally in late 2020 brought about an increase in demand for mining machines from within and outside of China. 

Canaan leveraged its “established market presence” to optimize its “international customer base, secured a large number of pre-orders from clients in both domestic and international markets, and streamlined our supply chain management to optimize our cash flow,” He said in a company release. However, the effort did not stop the disruptions from somewhat overshadowing the company’s attainment of a US$174 million contracted orders, efforts to improve their overseas expansion and the start of a mass production of the A12 series of bitcoin mining machines, amongst others.

SOS Limited, on the other hand, has been one of the best-performing crypto mining stocks in the market having grown by 104% in the past three months. The Chinese blockchain services company, which recently disclosed it has entered into a non-binding letter of intent to acquire the majority of the equity interests of each of three US-based power plants for its planned crypto-mining operations in North America, is optimistic of a general bullish trend for cryptocurrencies.

Having completed the set-up of its cryptocurrency business in China, SOS chairman, Yandai Wang, believes “that SOS’ cryptocurrency business will achieve significant results” with their planned development of a cryptocurrency mining operation in the US. The company plans to build a US digital mining site to host SOS mining operations as well as for other miners. 

Short-sellers Hindenburg Research and Culper Research on Friday Feb 26 raised concerns – ranging from regulatory risk to alleged false claims – about SOS Limited’s business in two separate reports. Its shares dropped immediately afterwards but had a market reversal came after the company reportedly uploaded videos of what is its cloud computing power center.