Japan’s DMM Shuts Down Crypto Mining Business

Another large financial company in Japan seems to leave the cryptocurrency industry. It was GMO Internet last week and this week, e-commerce giant DMM.com reportedly closes its mining business in Kanazawa, Japan.

Local news agencies reported that DMM.com had been leaving the emerging crypto industry on Sunday. Speaking to The Nikkei on Monday, the founder of the mining business of DMM.com, Keishi Kameyama said that he would work hard on “[ the] exchange[ business] and blockchains.”

The exchange business he is referring to is DMM Bitcoin, a group subsidiary that is one of the 16 regulated cryptocurrency exchanges in Japan. Before Kameyama spoke to The Nikkei on 30 December 2018, Toyo Keizai quoted the company as saying that “profitability deterioration is the main cause” for the company closing its business.

The company said that the security concerns of virtual currency mining had been underestimated. The official statement is as follows:

“I would like users to experience the extraordinary mining site in their lives. From such thought DMM opened a part of the [mining] farm to the public, but this was canceled in early June. It is because it is judged that ensuring security is difficult. Overseas, theft of virtual currency mining machines has been steady, and [there were attempts] even at the DMM’s Kanazawa farm.”

DMM founder Keishi Kameyama said recently that he intends to concentrate on the exchange business and the blockchain. The report from the outlet further elaborated that the process of withdrawal, which includes the sale of its machines, will be carried over to the first half of 2019.

DMM.com originally announced in September 2017 the establishment of its virtual currency unit and later started its mining operations in Kanazawa in October, where the company mined several cryptocurrencies. Last week alone, the company was already hesitant about the crypto industry, with DMM.com revealing that its Cointap crypto-trading app would not be launched as planned.

According to Toyo Keizai, DMM.com does not believe that it is the right time to attract unexperienced virtual currency traders thanks to the current bear market and the large hack of Coincheck that occurred in early 2018.

The departure of DMM.com from the crypto mining business is followed by the announcement by the Japanese IT giant GMO Internet that it will pull the plug on its mining operations. The company stated last week in a regulatory report that, as cryptocurrency prices continue to decline, the profitability of its cryptocurrency-focused mining chips reflects the same trend.

GMO Internet said “the environment is increasingly competitive because of the decreased demand mainly due to the decline in the cryptocurrency price, the decline in the sales price, etc.”