Questions Swirl Around NuMiner’s ‘Best in Class’ Bitcoin Mining Rig

When a antecedently chartless institution claimed to person created a bitcoin mining rig acold superior to the manufacture modular this month, galore successful the mining manufacture raised eyebrows.

Since then, the reddish flags person kept piling up: An artificial quality hardware institution claimed a photograph of its merchandise was appropriated to make the rig’s selling materials. The chipmakers supposedly progressive with the rig said they were unfamiliar with the project. The rig shaper admitted it had misnamed the laboratory that certified the machine, and did not supply capable accusation for CoinDesk to corroborate the 2nd laboratory it named.

It’s inactive unclear precisely what is going connected here. But the concern offers a stark reminder that crypto remains a noisy manufacture wherever investors get bombarded regular with bold claims that invitation scrutiny. Particularly successful the epoch of publically traded mega miners, wherever the fiscal gains astatine involvement are enormous, investors tin ne'er beryllium excessively careful.

On Feb. 3, Sphere 3D (ANY), a Toronto-based information absorption company, announced it was acquiring 60,000 mining rigs for astir $1.7 cardinal from NuMiner Global, a New York-based institution that appears to person popped retired of bladed air.

A hunt connected the New York authorities institution registry yielded zero results for “NuMiner.” The institution claims to beryllium affiliated with NuMiner Technologies Ltd., for which practically nary accusation is publically available.

NuMiner said its rig, the NM440, generates 440 terahashes per 2nd (TH/s) of mining power, oregon hashrate, with a powerfulness ratio of 20.2 joules per terahash (J/TH), according to the company.

Such specs would marque these miners the champion connected the marketplace by a important margin. It would apical the world’s biggest mining manufacturer’s newest mining computer, Bitmain’s Antminer S19 Pro+ Hyd., which boasts a hashrate of 198 TH/s and ratio of 27.5 J/TH and uses liquid cooling exertion to trim heat, sound and powerfulness consumption.

Sphere 3D’s banal surged much than 40% aft the announcement of the woody with NuMiner. Shares person fixed backmost immoderate of the gains since then, according to TradingView data.

When the quality of NuMiner’s woody broke, Luxor Technologies, the crypto bundle and services company, formed uncertainty connected the story.

“When we saw Gryphon's preorder yesterday, we were highly skeptical but gave the rig the payment of the uncertainty owed to Gryphon's property release,” Luxor tweeted. (Sphere 3D is merging with bitcoin miner Gryphon Digital Mining successful a reverse merger transaction.)

However, Luxor added determination are “too galore reddish flags” to see the NM440 a morganatic mining machine.

Meanwhile, Fred Thiel, CEO of 1 of the biggest publically traded miners, Marathon Digital, besides tweeted that helium was skeptical of NuMiner’s claims and voiced interest astir the cooling technology, oregon deficiency thereof.

“Based connected the picture, I’d beryllium acrophobic arsenic to however this miner pushes capable airflow to enactment chill capable to run successful [a] emblematic mining environment,” Thiel tweeted. “Definitely not designed for immersion based connected the picture.”

Volt Equity, a San Francisco-based concern firm, besides was speedy to explicit its skepticism astir NuMiner and opened a abbreviated position connected Sphere 3D stock. Volt tweeted it had reached retired to the laboratory that NuMiner said had tested its NM440 miners, and said the laboratory denied it ever tested the machine. The laboratory besides told CoinDesk it ne'er tested the machines.

There is precise small publically disposable accusation astir the company, but determination are immoderate clues astir who is connected the squad down this supposedly stellar hardware. NuMiner Global has three radical listed connected its website, but nary of them look to person overmuch acquisition successful crypto oregon mining.

The company’s CEO is Iain Kennedy, who astir precocious was a vice president of endeavor exertion and proviso concatenation astatine Canadian Tire, a retail institution progressive successful the automotive, hardware, sports, leisure and housewares sectors. Prior to that, helium was the planetary main accusation serviceman astatine BlackBerry, the onetime smartphone pioneer, and planetary main operating serviceman astatine Spin Master, a Canada-based “global children’s amusement company.”

The president of NuMiner is Tony Melman, who is besides Board Chair and CEO of Nevele Inc., a consulting steadfast specializing successful mergers and acquisitions. He besides served arsenic CEO of Acasta Capital and of Acasta Enterprises. The second was a special intent acquisition company (SPAC) that defaulted connected its indebtedness successful March 2018. Melman near the institution that month, according to the Globe and Mail newspaper. Prior to Acasta, helium was managing manager and spouse astatine Onex, a large Canadian plus absorption company, for 22 years.

Melman was besides appointed to Sphere 3D’s committee arsenic portion of the $1.7 cardinal acquisition agreement.

The 3rd idiosyncratic listed successful the website is Bruce Brent, ​​an autarkic director, who is main fiscal serviceman astatine existent property steadfast The Matthews Group, president of a household bureau and president connected the boards of a renewable vigor institution and different aerospace firm.

Affiliate NuMiner Technologies doesn’t look to person overmuch nationalist accusation either different than the property merchandise naming Thomas Hsu arsenic CEO. The institution besides appointed a peculiar probe and improvement (R&D) advisor named Richard Lee, who, according to NuMiner Technologies, is simply a erstwhile R&D manager with Taiwan Semiconductor Manufacturing Company (TSMC).

NuMiner representatives did not respond to CoinDesk’s petition for remark astir this entity.

Upon completion of the deal, the surviving institution would instrumentality Gryphon’s name. Analysts astatine Canadian concern slope PI Financial gave Sphere 3D a “buy” standing successful October, saying it would go 1 of the apical 5 mining firms successful the satellite erstwhile the merger is complete.

A fewer weeks later, the merger was delayed by a 4th portion the institution awaits “regulatory and shareholder approvals.”

Sphere 3D has faced its ain troubles. It conscionable settled a bankruptcy lawsuit successful a Utah court, successful which immoderate erstwhile and 2 current directors were accused of securities fraud and misrepresenting accusation to investors. Sphere 3D is named the suspect successful the case, but the bankruptcy really pertains to a subsidiary. Sphere 3D CEO Peter Tassiopolous and manager Vivekanand Mahadevan are the 2 defendants successful the lawsuit who are inactive serving connected Sphere 3D’s board.

Sphere 3D filed to disregard the allegations brought against it, including securities fraud, breach of contract, unjust enrichment and breach of fiduciary duty, but a justice ruled against the institution precocious past year, allowing the bankruptcy lawsuit brought by different steadfast to proceed. The companies disclosed the colony successful a tribunal filing Monday.

“Due to SEC [U.S. Securities and Exchange Commission] regulations, the institution has constricted quality to stock accusation with media and investors,” a spokesperson for Sphere 3D told CoinDesk successful an emailed statement. “The champion root for existent quality and accusation astir Sphere 3D is the ‘Investors’ conception of the Company's website.” That conception of the company’s website lone has details astir the company’s fiscal accusation including its superior structure, quality releases and SEC filings.

In its property merchandise announcing the mining machines, NuMiner said they had been tested by TÜV Nord’s certified laboratory BACnet Testing Laboratories. The laboratory denied the assertion successful an email to CoinDesk. BACnet pointed to the database of products for which it does prime control, which yielded zero results for crypto mining computers.

NuMiner besides claimed it is moving “in coordination with” TSMC, the world’s biggest chipmaker; electronics shaper Foxconn; and fabless spot decorator Xilinx.

TSMC told CoinDesk that NuMiner “is not a nonstop customer.”

A Xilinx spokesperson told CoinDesk: “To the champion of our knowledge, NuMiner has lone purchased 5 machine cards done 1 of our distributors. We person asked for our institution sanction and logo to beryllium removed from its website, on with immoderate associated selling materials.”

Electronics shaper Foxconn did not respond to CoinDesk’s petition for comment.

On Feb. 7, Cerebras, a California-based AI hardware firm, tweeted that a “crypto mining startup” institution had misappropriated a photograph of its CS-2 system. In an email to CoinDesk, Cerebras confirmed it was referring to NuMiner and noted: “In fact, you tin spot the Cerebras logo astatine the bottommost of the system.”

Other than the Mountain Dew-hued details, the images are beauteous overmuch identical.

Cerebras said it had contacted NuMiner and the institution has since removed the photograph from its site. CoinDesk aboriginal confirmed it had disappeared.

Gryphon Mining, for its part, told CoinDesk connected Feb. 8: “No comments connected this taxable for now. NuMiner has accusation they request to merchandise archetypal and it’s not our spot to remark astatine this time."

NuMiner said connected Feb. 10 that it antecedently misidentified BACnet Testing Laboratories arsenic its investigating lab. Instead, the laboratory is called BTL Inc., a Taiwan-based investigating company, certified by TÜV Nord, the institution said in a statement.

“The show specifications of the NM440 person been independently validated by starring planetary investigating institution TÜV Nord’s certified laboratory BTL Inc., a investigating institution based successful Taiwan,” the connection reads.

The institution besides noted that the archetypal representation of NM440 was taken down aft NuMiner was “recently made alert of a similarity successful the product’s representation to different merchandise connected the market.” The archetypal representation was “drawn for selling purposes,” the connection said.

“NuMiner is assured its revolutionary exertion volition alteration bitcoin mining, enabling customers to trim vigor usage and summation profits,” the updated connection continued.

TÜV Nord’s Taiwan bureau confirmed to CoinDesk the BTL laboratory is certified for ISO:17025, a basal modular for laboratory investigating astir the world.

However, BTL laboratory was incapable to corroborate whether they person tested NuMiner’s rigs. The laboratory requested a trial study number, which NuMiner hadn’t produced astatine the clip of publication.

The results of CoinDesk’s enquiry into NuMiner’s mining rig are acold from conclusive and the mining satellite is inactive waiting with bated enactment to spot whether the mysterious institution volition nutrient capable grounds to person its doubters determination is so a caller large subordinate successful the crypto mining rig manufacturing arena.