Binance goes for bitcoin cloud mining despite regulatory uncertainty
Amidst stringent regulatory scrutiny in the US, Binance is diving headfirst into the crypto mining landscape with a new subscription-based cloud mining service for bitcoin.
As of June 15, the company unveiled its novel cloud mining services, catering specifically to Bitcoin (BTC) mining aficionados who lack the requisite hardware to participate directly.
For those new to the concept, cloud mining involves leveraging a data center’s computing power to mine cryptocurrency, in this case, bitcoin. Hashrate, the speed at which these mining computations occur, becomes the crucial determinant of potential earnings.
Binance’s service offering allows subscribers to purchase a minimum of 1 terahash per second (Th/s) at $10.7280, with costs divided between the hashrate and electricity, respectively set at $1.17 and $9.558.
For the non-mathematicians among us, the higher the purchased hashrate, the better the chances of earning more bitcoin. However, there’s a twist in this enticing tale: the service isn’t available to crypto investors residing in the US.
This distinction stems from the legal predicament Binance currently faces stateside, with the Securities and Exchange Commission (SEC) accusing Binance’s US arm of operating as an unregistered exchange.
A pivotal play amidst legal strife
Binance’s US subsidiary has been in the regulatory hot seat, facing allegations of functioning as an unregistered exchange, broker, and clearing agency.
The storm escalated on June 9, with the US arm announcing a suspension of US dollar deposits and a potential pause on fiat withdrawals.
Despite the turmoil, Binance remains resolute, maintaining that Binance.com, the entity offering cloud mining services, operates separately from Binance.US.
It’s a strategic move that paints a picture of a company eager to innovate, even while navigating a legal minefield.
Cloud mining crusader or regulatory rogue?
The launch of Binance’s cloud mining products heralds a significant shift for the company, which has been a prominent player in the crypto mining pool for years.
These new services offer a gateway into the world of Bitcoin mining without the logistical challenges of managing mining infrastructure, potentially revolutionizing the landscape of crypto mining.
Yet, the elephant in the room remains the ongoing legal struggles. The SEC’s enforcement actions have resulted in several advanced trading pairs withdrawing from Binance’s US platform.
Moreover, Binance’s CEO, Changpeng Zhao, has been summoned to answer the SEC’s allegations, further complicating the situation.
Though undoubtedly exciting, the launch of cloud mining services is happening within an increasingly complex environment. Whether this bold move will pay off or compound the company’s challenges remains to be seen.