Digital CC ditches bitcoin, rebrands to Digital X

Digital CC has moved away from its long-defended bitcoin mining business to pursue its remittance product and focus on software development.
Written by Asha Barbaschow, Contributor

Former bitcoin miner DigitalBTC has ditched the cryptocurrency to focus on software development.

In addition to the shift in business model, at its annual general meeting on Thursday, Australian-listed DigitalBTC announced that its name would change to Digital X, with its parent company Digital CC to be known as Digital X, effective immediately.

"The rebranding represents a strategic change from a focus on bitcoin as a mechanism to store value to a focus on software development," the company said.

"While the company has made a strategic change towards applications within the remittance market, it is still leveraging its skills and experience gained within the bitcoin industry."

Earlier this month, Digital X told shareholders that it had terminated its Mintsy joint-venture agreement, citing ongoing concerns it held with Mintsy and the company's inability to meet its contractual requirements.

"Under such circumstances, [Digital CC] had no choice other than to terminate its role and relevant interests under the agreement," executive chairman Zhenya Tsvetnenko said at the time.

"Digital CC also confirms it has no further commercial digital currency-related dealings with ventures associated with its former joint-venture partner. Digital CC is now fully committed to the commercial rollout of its AirPocket remittance product in Latin America."

In May, Digital X raised AU$3.5 million to fund the development and rollout of AirPocket, an app-based peer-to-peer, cross-currency cash remittance platform.

"We have made significant progress during the course of the year towards the development and commercialisation [of AirPocket], with a number of agreements in place to accelerate the launch and consumer uptake of the product," Tsvetnenko said.

At its annual general meeting, Digital X said AirPocket will remain the company's focus, with the application currently in its second phase of beta testing.

The Perth-based company has had a tumultuous past with the cryptocurrency.

Digital X reported a net loss after tax of $6.77 million, and negative earnings before interest, tax, depreciation, and amortisation (EBITDA) of $3.16 million for the full year, ending June 2015.

Despite the loss, the former bitcoin miner continued to defend the cryptocurrency, highlighting that its FY15 results reflected a "strong performance from the company's bitcoin operations", with bitcoin mining generating $6.4 million in revenue.

At the time, Tsvetnenko said he was pleased with the growth the company achieved from its bitcoin trading and mining activities, which "continue to provide strong revenue generation".

Digital X initially found itself listed on the Australian Securities Exchange (ASX) following a reverse takeover of investment firm Macro Energy in June last year.

As a result, last financial year was the last time the company sat in positive territory, with net profit after tax of $600,000 on revenue of $4 million, and EBITDA of $2.5 million.

In the first quarter of this financial year, the company reported its first loss, with a negative net operating cash flow of AU$261,000 for the three months ending September 2014. According to the company, despite the drop in value of bitcoin, the devaluation had not impacted its performance.

"Investors should of course remember that movement in the bitcoin price has little bearing on the technology and the digital currency revolution, of which we are a leading participant," Tsvetnenko said at the time.

"Short-term fluctuations do not affect our continued progress, and we are well funded to operate our business and work towards achieving our near-term goals around managing our mining capacity and launching our cutting-edge software products."

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