US-listed bitcoin miner The9 eyes Russia relocation after China crackdown

Shanghai-based online gaming and bitcoin mining firm The9 City has signed an agreement with Russia-based colocation provider BitRiver for a capacity of 15 megawatts.

The9 said the initial hosting period with BitRiver will be two years, after which it can be extended for another year. It's part of The9's ongoing effort to seek electricity and facilities in different regions to deploy its bitcoin mining equipment either through proprietary capacity or colocation providers.

Originally an online gaming firm listed on Nasdaq, The9 revealed its pivot into mining in January and began operating in February. As of the end of March, it owned about 126 BTC, per a regulatory filing in the U.S. 

The bitcoin mining company is facing regulatory headwinds due to provincial governments in China handing down orders to cut off energy supplies for bitcoin mining facilities in June.

The 15 megawatts reserved so far at BitRiver appears to be far from enough, however, for housing all of the equipment that The9 purchased earlier this year, based on the tech specification of these purchases.

The9's investment in China

Based on its 2020 annual report released in March, The9 issued several rounds of new equity in Q1 to raise money for purchasing an older generation of bitcoin mining equipment when there was a supply crunch for the newest generation of machines.

Between January and March, The9 bought over 35,000 old bitcoin ASIC miners with a combined hashing power of 745 petahashes per second.

It deployed the majority of them in Chinese provinces including Sichuan, Xinjiang, Qinghai, Inner Mongolia and Gansu, the company said in the annual report.

In March, The9 further signed a purchase agreement with Bitmain to buy 24,000 new models of Bitmain's flagship AntMiner S19j for $82 million. As of then, it paid $16.6 million for the first installment with a delivery schedule starting from November.

The9 has not made any further statement regarding what it plans to do with all of its mining equipment that was once operating inside China or where it plans to host the upcoming batches of machines from Bitmain.

A big impact

The9 is one of several U.S. listed Chinese bitcoin mining firms that have been affected by China's crackdown orders.

NYSE-listed BIT Mining, previously known as 500.com, announced its relocation plan to Kazahkstan last month as its mining facilities in Sichuan were ordered to shut down.

Nasdaq-listed BIT Digital, which had 80% of its over 40,000 bitcoin mining machines located in Xinjiang, Sichuan and Yunnan as of May, is yet to disclose future plans on its mining operations.

Meanwhile, bitcoin mining colocation providers outside China have announced plans to scale up power capacities in anticipation for the exodus of Chinese miners following the government crackdown.