Chinese-owned cryptocurrency company suspends local operations

Published: Jan. 14, 2019 at 12:32 PM CST
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Bitmain Technologies, which purchased part of the old Alcoa plant to house a data center, announced last week it would temporarily suspend operations at the Rockdale location amid changes at headquarters.

Bitmain announced the Rockdale operation last summer to the delight of Rockdale and Milam County officials who hoped the center would bring as many as 400 jobs to the city of 5,800 in the first two years of operation.

Last week's announcement was met with a chillier response, but Milam County Judge Steve Young said even though initial reports said operations were suspended, Bitmain officials informed him work in Rockdale would be able to continue on a scaled back plan.

Five Bitmain employees remain at the Rockdale site, according to Judge Young.

Rockdale and all of Milam County have been struggling economically since the Alcoa power plant and a smelter shut down, that alone contributing to a 30 percentloss in tax revenue.

Young characterized the Bitmain deal as a "step in the right direction" to bring positive news, tax revenue, and jobs to the area.

Many in the city were interested and excited to see what Bitmain could bring to the area.

Those who pay attention to cryptocurrency markets say Bitmain's decision likely had to do with volatility in those markets, which they say also might be the reason Bitmain replaced its co-founders Wu Jihan and Zhan Ketuan on the same day the company made the announcement about scaling back in Rockdale.

Bitmain reportedly spent millions to renovate the old Alcoa building to serve its purposes, which included 7,000-8,000 computer servers at the Rockdale site.

The company, self-described as a world leader in blockchain hardware, software and services, said it would make an initial investment of more than $465 million in retro-fitting buildings, machinery and equipment at the Rockdale site.

Milam County Commissioners and the Milam County Industrial Development Corporation together approved an incentive package that included a tax abatement that was to be phased in over 10 years.

Bitmain has been through dramatic shifts as it tried to adjust to a prolonged bearish cryptocurrency market.

The company was sued in U.S. federal court over allegations it was siphoning processing speed off to the company, and has reportedly fired a significant portion of its global workforce.