NEW YORK (InsideBitcoins) — The reports on bitcoin news sites, as well as on financial news outlets such as the Wall Street Journal and Bloomberg, have said that KnCMiner has decided to stop selling hardware and will no longer service its customers. The company’s goal, the reports have said, is to move into the mining business for its own benefit. Bloomberg’s headline, slightly modified and used in various forms by other news outlets worldwide, was “Bitcoin Miner Ditches Clients to Chase $2 Billion Coding Prize.” Other media headlines included, “Swedish Bitcoin Miner Kicks Out Clients,” “…Stops Sales of Equipment,” “…Leaves Customers.”
KnCMiner says that it’s just not true.
“Bloomberg has taken something out of context, twisted it a bit and exaggerated it further, resulting in an untrue article,” Nanok Bie, director of communications at KnCMiner, told Inside Bitcoins. “We haven’t stopped selling hardware; all available units are sold-out for the moment, though.” In fact, the company predicts that it will have a new line of hardware products for sale by the end of the year.
But reports that the company has expanded into the mining front are true, Bie admits. The company projects $2 billion worth of bitcoin will be mined over the next few years, if today’s price were to stay constant. KnCMiner, with a 5% share of cloud mining today, wants to grow that to 20%.
KnCMiner’s troubles may involve quite a bit more than bad public relations, though. The company is also the potential target of at least one class action suit. California attorney Charlotte C. Lin has launched a website dedicated to exploring potential legal action, saying the firm is “investigating KnCMiner for possible breach of implied warranty of fitness, misrepresentation, and other violations of law by failing to provide a functional or usable product, false advertising; failing to deliver product within adequate time frame, and failing to provide refund upon demand.”
Another attorney, based in KnC Miners’ home city of Stockholm, is also reportedly looking into the possibility of pursuing legal action. Bie seems unconcerned:
“No class action suit has been communicated to us, probably because there is no basis for such a claim (for instance, a U.S. process is not applicable in the EU),” he says. “The term ‘ambulance chasers’ apply here, and some of them recruit in forums.”
The KnC Miner blog adds, “We’d also like to add caution stemming from reports of phishing sites and so called “ambulance chasers” looking for prepaid retainers using our brand while claiming some sort of “legal” action – this is also being repeated in some online media outlets. These sites are sometimes paid for by the competition, sometimes supported by paid editorial content and forum posts with made-up legal claims.”
The statement continues, “As one of the biggest companies in the space we get our fair share of attention and there are lots of rumors on us going around, being published in online media. Often it’s nothing more than click-bait, commonly based on info taken from a fraudulent claim-website. At times also bigger media outlets publish edited, twisted and incorrect quotes out of context because it makes for better headlines. We’re not commenting on each and every rumor as we choose to focus our time on producing and delivering the most efficient cryptocurrency products on the market.”
Meanwhile, Inside Bitcoins contacted Bloomberg editor Simon Thiel, who worked on the KnCMiner article with reporter Niclas Rolander in Stockholm. Shortly after our request for comment the Bloomberg headline was changed to “Swedish Bitcoin Miner to Chase Bitcoin Coding Prize” and content corrections were made to the article, removing the references to KnCMiner ending hardware sales.
Theil forwarded our quote request to Catrin Thomas, a Bloomberg public relations rep in London who said, “We followed our standard practice to correct the story where needed and stand by the story as corrected.”
At the time of publication, no other news outlets have issued corrections to their published reports.
Additional reporting by Hal M. Bundrick