Cryptocurrency mining firm CEO bails out with $35 million
Sky Mining CEO Le Minh Tam has disappeared with $35 million. He apologises for any inconvenience.
Le Minh Tam, CEO of Vietnamese crypto firm Sky Mining, has parachuted out with $35 million, local news reports. He's believed to have gone to the USA, which doesn't have an extradition treaty with Vietnam.
Two days after his disappearance, Tam wrote to his investors on Facebook and said he was sorry for "everything," but that he had no choice except to run to save his life.
"My last resort is to stay hidden from public to protect my life," he said. He suggested that investors travel to Ho Chi Minh City to recover their capital, and that the company would declare bankruptcy to give back the remaining funds.
But when they arrived, the place was empty and the building closed. It later emerged that hundreds of mining machines were surreptitiously removed from the company's factory in a nearby province, taken by a group of people claiming to be maintenance workers.
Tam attributes his flight to the unpredictability of the cryptocurrency markets and the loss of value of both cryptocurrencies and the mining machines themselves.
Sky Mining deputy chairman Le Minh Hieu has said that he and the other Sky Mining staff are also victims of Tam's disappearance, and that they are still receiving threats from those who lost their money.
The description given of Sky Mining suggests it is a "multi-level-marketing meets a rent-a-miner" scheme.
People would pay up front for the mining machines, while Sky Mining would operate it on their behalf and give back "guaranteed" returns. At the same time, Sky Mining organised a series of flashy Ponzi-esque publicity events and created incentive schemes for participants to sign up others for Sky Mining.
It's not the first rent-a-miner scheme to land in hot water as a result of falling bitcoin prices, but it might be one of the more spectacular failures. It might be especially spectacular given how inhospitable Vietnam is for cryptocurrency mining. The heat and humidity is generally more than a match for mining hardware.
It's difficult to imagine an efficient bitcoin mining outfit being profitable in the country, let alone a highly inefficient one that needs to split profits between the company and the machine buyers.
Vietnam is also quite inhospitable towards cryptocurrencies in general, with authorities discouraging their use and declaring them illegitimate.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VET, XLM, BTC and ADA.