The SEC Stops Kodak Bitcoin Mining Scam

The plan to launch Kodak-branded bitcoin mining computers has collapsed after the venture failed to obtain a license to use the Kodak name and U.S. Securities and Exchange Commission (SEC) was said to have halted the plan and effectively prevented the KashMiners computers from being rented out as originally intended.

In January, a Kodak-branded mining computer was displayed at the Consumer Electronics Show (CES) in Las Vegas. Critics quickly called the technology as a "scam."

As originally introduced, the Kodak KashMiner was a bitcoin mining machine that would be rented to prospective miners for two years for a $3,400 fee. This fee included the equipment cost, an air freight export license, export customs clearance, and U.S. customs duties and clearance. Customers could keep a cut of the profits that were mined, and would reportedly earn $375 per month for the course of the contract. These promising profits, however, did not factor in that mining bitcoin has become progressively more difficult, and that anyone who took this risk could have faced a loss on the investment. 

To mine the cryptocurrency, the computer solves complicated mathematical problems that work to verify crypto transactions. (Read more: How Does Bitcoin Mining Work?) 

After doing the math, critics determined that in order to make the scheme play out according to the plan, bitcoin would need to retain an average price of $28,000 per coin over the time period. Bitcoin's price has dropped to less than $6,700 per coin today.  

Additionally, according to the BBC, the third-party company responsible for the Kodak miner, Spotlite USA, never licensed Kodak's brand for use on the machine. This was a rebranded version of Antminer S9, a bitcoin miner made by the Chinese company Bitmain.  

Spotlite USA chief executive officer Halston Mikail said that the company would continue mining privately with equipment installed in Iceland, rather than renting this ability out to consumers. 

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