Bitmine AG, the Swiss Bitcoin mining hardware producer which CCN.com recently reported was facing multiple lawsuits in regards to undelivered hardware and broken promises, has declared bankruptcy in the Swiss city of Bellinzona.

In a lengthy note posted to their website, Bitmine explained their insolvency, complete with a breakdown of costs versus income. Cold comfort for the customers who never received their hardware at all, of course, and in most countries, bankruptcy means that all creditors are basically out of luck. In the case of a company taking pre-orders, it seems that’s really what the customers were: creditors, investing their money in a company which turned out to be risky and shifty.

BITMINE AG has sold in 2013 and 2014 a gross total of 12.1M CHF [$12.8M USD] of products in various currencies and forms (Fiat and Bitcoin). […] With a grand total of 14.4M CHF [$15.3M USD] you may be wondering why this is actually higher than the above-mentioned sales volume. Just remember to add 1M share capital, 0.8M of loans with third parties and 0.6M of self-mined bitcoins in our operations in Iceland. If this last number may seem low to you, please remember that most of the miners in Iceland were offered as compensations to former customers through bitmine.io, leaving us only the smallest part of profits for our own operation.

“A Scam or Not”

Bitmine specifically claims that it was not a scam, which is interesting. They had not previously acknowledged claims that it was a scam, least of all to this reporter, who tried on multiple occasions to reach them in regards to the previous story written about them.

The second most asked question is whether we were a scam or not. We were not because we have actually delivered a significant amount of our products. Despite all the above-mentioned problems, out of the 3500 units that we sold and we got prepaid for, we have delivered to our customers more than 2000 units, all produced in our facilities.

Let’s examine the above quote for a moment. Giving the benefit of the doubt, and rounding up to 2500 units paid for and shipped, that leaves 1,000 units paid for and never delivered, or nearly 30% of orders. There are very few businesses where this level of success would be considered good business, upstanding, or “not a scam.” Indeed, (a minimum of) three in ten people making purchases with Bitmine never received a thing.

It is hard to tell by what metric Bitmine believes that at least a roughly 30% failure rate is “not a scam.” Certainly we know that the businessmen behind the company were inexperienced on numerous fronts. There will be those who were not burned by them who will say they were just trying to push the envelope too far, and that they failed, and that these things happen. But what fault is that of the customers who never got anything for their money, and never got a refund, either?