CEX.IO halts cloud mining service due to price drop, energy costs

The UK-based cloud mining and exchange service CEX.IO announced Monday a temporary suspension of cloud mining services, stating its decision took into account its users’ interest, the recent drop in Bitcoin’s price, and the upscaling of the mining difficulty.

In a company blog post, CEX.IO referenced part of its terms of use, which says: “Mining with using User’s Gigahashes can be stopped by CEX.IO if the amount of the Maintenance Costs exceeds rewards for each mined block or if the mining is economically inexpedient.”

Jeffrey Smith, CEX.IO’s chief information officer, said in the blog post:

“Suspension of CEX.IO cloud mining service is only a forced temporary measure, the result of cloud mining costs exceeding mining profit. Currently all cloud mining/maintenance costs are directed to the Hardware provider, hence, we are open for negotiations with additional mining hardware providers, who can offer favourable terms. And, as soon as we get an opportunity to upgrade mining hardware, or come to more efficient terms with energy suppliers, cloud mining process will be automatically resumed.”

The company said it would continue operating as a full service exchange platform for trading digital and fiat currencies.

Smith told Inside Bitcoins that the digital currency’s price would need to be around $320 for the cloud mining operation to be profitable, though that amount could change in the future.

He did say that CEX.IO would implement an “unpause button,” allowing individual clients to continuing mining if they wished.

Inside Bitcoins said that over the past few days, GHash.IO, the mining operation for CEX.IO, accounted for 12 percent of the total hashrate. With the company pausing its operations, other competitors could acquire more the available mined bitcoins, alleviating the same issue for other suppliers.