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Hashflare Cancels All Bitcoin Mining Contracts: Community Cries Foul

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Just two days after suddenly making demands for all customers identity documents, the company known as Hashflare has released an email hours ago titled “[IMPORTANT] End of Mining Service of SHA-256 Contracts”. According to the email, all current SHA-256 bitcoin mining contracts will be terminated today, July 20. Many on Twitter and Reddit are calling this an exit scam.

Hashflare

28 Days Later

According to the email that just went out, the company has been unable to make any bitcoin payments to its contract holders for the last 28 consecutive days due to the amount earned being allegedly less than the daily maintenance fee the company charges. This, they claim, what is causing all contracts to be terminated prematurely.

The email states that the company is within its rights to do this as the action is “in accordance with clause 5.5 of our Terms of Service, which are required to be accepted when creating a purchase and are the basis of concluding the contract.”

Clause 5.5 of the terms of service reads:

The Mining process continues until said mining is profitable. This means the Mining process will stop if the Maintenance and Electricity Fees will become larger than the Payout. If mining remains unprofitable for 21 consecutive days the Service is permanently terminated

The terms seem to be unaltered, as an identical copy can be found on archive.org stretching back to at least last year.

Fire and Brimstone

The community reaction has so far been overwhelmingly negative. Some users who joined the service just recently and stand to suffer the most loses have claimed that they are trying to perform a chargeback with their banks. Others are stating that they considering filing law suits against the Estonia-based company, but it’s too soon to tell whether or not anyone will proceed with legal action.

https://twitter.com/a_dellascio/status/1020398365970857984

Another subset of users are questioning the legitmacy of Hashflare’s claim that mining is no longer profitable. Users are posting screen shots of mining calculator sites like Coinwarz.com which suggests that currently mining is profitable, especially considering the uptick in price that bitcoin has seen in the last week. But profitability is apparently not enough, as the terms seem to be that mining hasn’t to be profitable enough to pay for their own maintenance fees

Other users had interesting comments to share, such as these:

From Bad to Worse

Today’s announcement comes several months after Hashflare suddenly changed all pre-existing bitcoin mining contracts from being “lifetime” to one-year. That sudden change in policy which the company again justified via its contractual terms caused support for the company to plummet. That change seems moot, however, as all bitcoin mining contracts still faced cancellation in much the same way that we saw today.

Another point to consider is that just two days prior to this, the company suddenly started requiring all users to submit ID data to identify themselves. Users who failed to do so were told they could potentially lose access to their accounts if they failed to comply. The timing of this sudden requirement seems coincidental, and some users are suggested this was done as a protective measure against impending lawsuits.

Redditor /u/urgodfather had a few things to say for those considering legal action.

There are plenty of users thinking class action lawsuit. If you decide to go this route, keep in mind that you will be exposed. Hashflare is going to air it all out. They aren’t going to keep your privacy in mind at all.

Closing the Book on Hashflare

With this announcement, it is our guess that the community has likely lost all trust in Hashflare. The companies main competitor, Genesis Mining, appears to still be paying out and has not made any statement so far on Hashflare’s actions. Previously when Hashflare changed their contracts from life time to one-year, Genesis Mining released a statement saying they would never take advantage of legal jargon to act against their customers best interests.

For those who currently have a balance on Hashflare, it appears that the previous withdrawal minimums of 0.02 BTC have been removed. However, the site is currently imposing a 0.01 BTC maximum daily withdrawal, which is around $75 at today’s prices.

For users that previously had lifetime contracts, they will only be losing about a months worth of potential mining income as that change occurred 11-months ago. But for those that joined just recently, they stand to lose as much as a year of mining profits. It’s also quite likely that cloud mining itself will take a hit and fewer users will be willing to invest in it as a result of the collapse of Hashflare.



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Author

Robert is News Editor at Blockonomi. A true believer in the freedom, privacy, and independence of the future digital economy, he has been involved in the cryptocurrency scene for years. Contact Robert@blockonomi.com

18 Comments

  1. Avatar
    Chris Fenwick Reply

    I feel so used by this organization. Regardless of what the contract states, the lack of decency in how they’ve decided to handle this is astounding. As if they are entitled to our money simply because we signed. I purchased a 3K contract in May and had not even reached two months. If they’re not even using my revenue to mine any additional bitcoin, why can’t I receive my pro-rated payment back? And if there’s a good reason, let’s hear it. Otherwise it might as well be stealing, contract or not. Someone let me know if there’s a class action forming. I’d be willing to sign on.

    • Avatar

      i think we should take action , because whatever left in valid contract are our valid money

      • Avatar

        what is left?

        Tell me what is left?

        they take the money up front, spend it on machines etc. The money is GONE. The only way to give money to you would be to use the machines for mining. If the machines cannot earn more then what it costs to run, they it is not profitable. If you want them to run at a loss, then YOU should compensate them.

        But as it stands, is nothing left. The money is gone.

        But you somehow dont get it do you.

        Let me try to explain it in a way you might understand.

        THE MONEY IS GONE YOU MENTALLY CHALLENGED FUCKTARD!LEARN HOW TO READ AND COMPREHEND A TOS.

    • Avatar

      It sounds like some of you are mentally challenged. To be honest, you sound like a typical american.

      I remember warning an american not go into bitconnect.
      me: dont do it, the risk is too high
      american: hurrr durrr, I accept the risk
      me: you can lose it all
      american: hurr durrr, I can sue them if I do.
      me: dont be retarded. Be responsible with your money
      american: hurr durr, I dont know how.

      YES I personally have cloud mining, YES I read the contracts, and YES I agree that it can be terminated without compensation.

      This is what everyone agrees to when they do cloud mining. Your investment is not used on an ongoing basis for mining. Your funds are spent on new machines. The maintence fee is what covers the building rent, staffing costs, power costs.
      Bottom line? You threw in $3k. You accepted the risks, you have to accept the consequences.

      If you are really mad, why not sue whoever allowed you to manage your own finances, as it clearly seems that you are unable to manage the basics yourself. Maybe sue the state, demand they provide a carer to look after you, as you clearly lack the mental capacity to look after yourself.

  2. Avatar

    Everyone is so much into disclosing ponzi these days. HF have resumed SHA already. Too much mess out of this

    • Avatar

      Yeah, everyone is riding on any hype topic whatever it is )
      Hash flare’s contracts were resumed, go check it guys!

  3. Avatar
    Cambia Fidas Rionero Reply

    Yup, they resumed contracts as I saw that on FB. To he honest crypto is risky, like you never know

  4. Avatar

    In order for the contracts to not get suspended the value has to go up, otherwise, we are doomed.

  5. Avatar

    I was it’s customer for 4 years, since 2014 when they opened. nobody has problems with their working process, always great especially here in italy with no mining companies here.

  6. Avatar

    Unfortunately, payments are low due to the course of the bitcoin and minig difficulty

  7. Avatar

    Bitcoin and Mining had a really GREAT time when it was 2016-2017… they HAD a really great time. now btc is really low priced, and nobody knows what to do. anyway all investors had to know all risks of it and hash flare tried to fix it as i see, i was with HF for 1 year and with some more BTC project like BTC broker platform so I think now is not a great time to work with BTC, we have to wait for a great one again

  8. Avatar
    Smn from nw Reply

    I do not think everything will be changed. I hate HashFlare for their hopes market will be profitable, but also I hate myself for it. I do not what to do, I lost a lot of money but I can not blame them and judge anyway we have to wait I read they are waiting for some time BTC will be 9k when minings is OK for eveyone what do you think guys?

  9. Avatar

    People just can not understand how BTC works – if Dollar will down USA and all companies connected with DOLLAR will do the same too, so there is no way to judge HashFlare for ahything.

  10. Avatar

    Crypto winter touched us all. We can’t blame HF for such market conditions…it’s too complicated system. But they could reduce maintenance fees, they are to high in my view. That doesn’t help.

  11. Avatar

    Hey guys I donna know bout’ BITCOIN and crypto world but I was the customer of genesis for a long time just put money there without knowledge and yes i did not get anything i do not think that if genesis has so little payments hashflare has better situation you have to understand it too

  12. Avatar
    Henry JOLO Reply

    But HF did not cancel contracts! Just stopped them. Genesis did. Why nobody judged them? scoundrel

  13. Avatar

    If there is a Class Action Lawsuit coming, please let everybody know. This company shouldn’t be able to get away with this. Not to mention, those that have 1 year contracts, there year is expiring or has expired already, basically losing all.

  14. Avatar

    Their site was (and is?) still up selling contracts and they had no intention of paying?

    That indicates a deliberate scam so don’t defend them by blaming crypto market conditions.

    The correct course of action:
    Prosecute them, make them pay compensation, seize assets and distribute the balance to all contracted investors. They are subject to regulation under EU law. Estonia won’t want a reputation of being a home for scammers so should punish them.

    Don’t waste time hating people for believing Hashflare’s promises, those people are already being punished by having their money stolen.

    Don’t waste time on anyone asking for an up front fee for a class action. They are scamming the victims of a scam.

    Please let people know of any legitimate class action against hashflare so justice can be done.

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