The bitcoin mining firm KnCMiner based in Sweden is declaring itself bankrupt in a preclusive step to save its revenues.

According to the company’s CEO Sam Cole, the main reason for the decision undertaken by KnCMiner’s board is the expected drop in bitcoin’s transaction block reward subsidy. With a reward of 25 bitcoins per block being cut by half, the incomes will be halved, as well, which makes bitcoin mining inefficient for the company.

“Effectively our cost of coin – how much we produce the coins for – will be over the market price. The price is now [roughly] $480. With all of our overhead, after July, the cost will be over $480. All of the liabilities we’ll have after that time will be too high,” CoinDesk quotes Sam Cole.

The company plans to sell its profitable parts, though yet without any specification.

Earlier, KnCMiner succeeded to raise about $32 mln from investors and was included by Business Insider UK in the list of 21 most influential bitcoin startups.

In June 2015, KnCMiner deployed a new 16nm Solar ASIC which was six times faster than the company’s previous one, claiming the hardware was to become a game changer for the industry.

“We knew that there were risks related to doing this in Sweden. We aimed for the skies, not to build a mediocre medium sized business. We got big investors on board and took a chance. But it hasn’t paid off,” Sam Cole explained.

He added that the “rapid capacity expansion” of their competitors was another reason which led to the decision.

The company’s website and official twitter account have not been updated since October 2015. Still, as recently as March 2016, Sam Cole was not ruling out the opportunity to return to producing “enthusiast level” bitcoin mining hardware.

Maria Rudina