|Bitmain Technologies, Ltd.|
|Key People||Wang Haichao, CEO: Jihan Wu, CEO and Co-Founder; Micree Zhan, Co-Founder; Luyao Liu, CFO|
|Products||Bitcoin mining hardware and mining pools|
Bitmain Technologies, Ltd., founded in 2013, is a privately held company based in Beijing, China, with offices in Hong Kong, Qingdao, Chengdu, Shanghai and Shenzhen. In January 2018 Reuters reported that Bitmain was opening an office in the Swiss "Crypto Valley" town of Zug.
Bitmain is the world's largest producer of specialized bitcoin mining hardware. The company develops and sells these specialized machines using its application-specific integrated circuit (ASIC) chip technology, including a line of proprietary mining machines called Antminers. Additionally, Bitmain mines on its own behalf and operates at least two mining pools, BTC.com and AntPool. According to published reports, these two pools alone can account for almost 42% of all bitcoin mined worldwide in a week. Each pool can also mine about 10% of the total Bitcoin Cash mined in a week. In light of the fact that both of those cryptocurrencies use the same algorithm, Bitmain might have a dominant position in bitcoin if it turned all of its efforts to mining bitcoin alone, without Bitcoin Cash.
Bitmain announced in August 2018 that it had begun the process of filing an initial public offering (IPO) valued at up to $18 billion, which would make it one of the largest IPOs ever. Caixin, a Chinese news agency, reported on July 6, 2018 that Bitmain had raised additional funds of between $300 million and $400 million in a funding round that valued Bitmain at about $12 billion. Bitmain did not announce the participants in this pre-IPO funding round, and a number of the rumored participants, including SoftBank Group and Tencent, publicly denied having made investments.
On September 26, 2018, Bitmain published a draft of the locally required "application proof" (prospectus) for issuing shares on the Stock Exchange of Hong Kong (SEHK), which presented a comprehensive look into the company across its 438 pages. Among the figures Bitmain reported, the company stated that it had had revenues of more than $2.8 billion in the first half of 2018. 94.3 percent of those revenues derived from its sales of mining hardware and 3.3 percent from its proprietary mining activities. Its profit before interest, tax, depreciation, and amortization (EBITDA) was $1.1 during the six-month period. The number of shares in the company was redacted from the application proof.
In mid-December 2018, media reported that the SEHK had signaled that it was reluctant to approve Bitmain's listing due to Hong Kong regulators' concerns about the immaturity of the cryptocurrency industry.
In June 2019, Bloomberg published a story saying that Bitmain was in the process of preparing for a new IPO in the United States, according to people with knowledge of the matter.
On December 10, 2018, Bitmain confirmed to Coindesk that it was closing its 23 person operation in Israel, which was working on blockchain and artificial intelligence technology for the company, ostensibly to save money. Later that month, Coindesk reported that a Bitmain employee had confirmed to it that the company had begun employee layoffs.
In January 2019, the company announced it would be closing its Amsterdam office as well.
Bitmain reportedly provided the SEHK with third quarter 2018 financial results, indicating a loss that period of about $500 million with revenues of about $200 million. Approximately $100 million of the losses were attributed to the decline in the value of its extensive cryptocurrency holdings.
In March 2019, Bitmain began deploying 200,000 units of mining machines from its inventory in southwestern China. The goal of this was to take advantage of excessive rains in the region, which caused the price of hydroelectric power to go down. Sources close to the matter said that this would cost Bitmain at least $80 million, and the projected profit from mining at reduced operational costs would be roughly $7-8 million per month, as long as the price of hydro-powered electricity stayed low.
World Digital Mining Map
On September 27, 2019, Bitmain announced a new service called the World Digital Mining Map to help bitcoin farms attract miners. Bitmain publicizes farms' offerings and will advise miners on design and operations.
U.S. bitcoin farms
Bitmain announced on October 21, 2019 that it had launched the first phase of its Rockdale, Texas, farm for bitcoin miners. Planned to be the largest farm in the world if expanded to its full potential size, the 25 megawatt operation is currently being expanded to 50 megawatt capacity. DMG, a diversified blockchain firm which operates farms throughout North America, provides hosting and management services at the location. Having already installed 15,000 miners at the facility in Texas, DMG announced on January 6, 2020, that it had agreed with Bitmain to terminate their management agreement because "cost and operational efficiencies have not materialized as planned."
Executive staff changes
The company confirmed rumors in a March 26, 2019, blog post that Jihan Wu and Micree Zhan had stepped down from their roles as joint-CEOs, but that they would continue to work with the company as directors. The post said that company insider Haichao Wang had taken over as CEO.
In October 2019, news services reported that Wu had taken on the role of Chairman again and that Zhan had left the company in an acrimonious split. Zhan filed suit in a Cayman Islands court in December asking the court there to reverse the shareholder vote in October which resulted in his ouster from the company. Ostensibly seeking to build support among remaining Bitmain employees, Zhan posted a statement on his Chinese social media Weibo site that questioned the need for layoffs that the company had forecasted. According to press sources at the time, Zhan's statements promoted the company's capabilities and prospects for growth in artificial intelligence technology, assuring workers that there is plenty of work.
Local Chinese court freezes $514,000 of assets
In December 2019, a local court in the Fujian province of China froze 3.6 million yuan - $514,000 - worth of stake in its subsidiary, Fujian Zhanhua Intelligent Technology Co. The freeze will last three years, ending on December 16, 2021.
Bitcoin Cash ABC Lawsuit
In December 2018, American telecommunications firm United American Corporation (UAC) sued Bitmain co-founder Jihan Wu, as well as Kraken CEO Jesse Powell, Roger Ver, and key Bitcoin ABC developers. The United American Corporation lawsuit alleged that Ver and the others manipulated the cryptocurrency market by making Bitcoin Cash too "centralized," allowing them to unjustly enrich themselves by that conduct. In addition to accepting Bitcoin Cash as payment for hardware, Bitmain produces hardware that is used for mining Bitcoin Cash, mines Bitcoin Cash for its own account, and operates and shares in pools that mine Bitcoin Cash. Bitmain carries significant amounts of Bitcoin Cash on its balance sheet as cash.
Ousted CEO fights back
In 2019, Bitmain's CEO and co-founder Micree Zhan Ketuan was dismissed from his role by Jihan Wu. In December 2019, Zhan stepped down as CEO; Wu then assumed the role. By January 2020, he had ceased to be the company's legal representative. Zhan filed multiple lawsuits against Bitmain and its subsidiaries to regain his lost position.
In early June 2020, Chinese media sources reported that Zhan, accompanied by armed guards, took over Bitmain's Beijing office. In a statement, Wu asserted that the takeover was illegal because his Hong Kong entity is the sole owner of Bitmain Beijing. The armed takeover of the office followed a skirmish outside the Beijing Municipal Administration of Industry and Commerce in May when a group of masked black-clad men threatened Zhan after receiving a business license for Bitmain Beijing. The masked men took the license document from Zhan. According to reports, Bitmain's chief financial officer representative and previously registered Bitmain "Legal Representative" Luyao Liu was arrested after the confrontation.
Poolin non-compete lawsuit
In 2019, Bitmain filed a lawsuit in a court in China against Pan Zhibiao, Li Tianzhao and Zhu Fa, the three co-founders of bitcoin mining pool, Poolin. The lawsuit alleged that the three co-founders violated a non-compete agreement, and sought $4.3 million in damages, later increasing the amount to $30 million in a subsequent appeal. The appeal was denied by the Chinese courts, but Zhibiao, Tianzhao, and Fa were ordered to pay fines of $200,000, $178,000 and $154,000, respectively.
- Jihan Wu - Co-founder
- Micree Zhan - Co-founder
- Wang Haichao - CEO
- About Bitmain. Bitmain Technologies.
- Chinese bitcoin mining giant sets up Swiss subsidiary. Reuters.
- Bitmain Dominates Bitcoin Mining, Approaching 51%. Finance Magnates.
- Crypto Unicorn Bitmain Weighs $18 Billion IPO, One of World's Largest. Coindesk.
- Chinese Bitcoin Mining Chip Maker Bitmain Considers IPO. China Money Network.
- Mining Giant Bitmain Valued at $12 Billion in New Funding Round. Coindesk.
- Big Investors Deny Involvement In Crypto Miner Bitmain's Pre-IPO Funding. Coindesk.
- Application Proof of BitMain Technologies Holding Company. Hong Kong Exchange.
- Hong Kong regulators say IPOs by cryptocurrency businesses are premature, putting Bitmain’s US$3 billion fundraising plan in peril. South China Morning Post.
- Bitmain’s IPO application expires; company appoints new CEO. The Block.
- 2019’s Focus is on Customers. Bitmain.
- Bitmain Revives IPO Plan as Bitcoin Hits One-Year High. Bloomberg.
- Bitmain Closes Israel Development Arm Citing Crypto Bear Market. Coindesk.
- Bitmain Poised to Appoint Tech Chief as New CEO, Says Report. Coindesk.
- Chinese Mining Giant Bitmain Is Closing Another Overseas Office. Coindesk.
- Mining Giant Bitmain Posts $500 Million Loss in IPO Financial Filing. CoinDesk.
- Bitmain Reportedly Plans to Install 200,000 Crypto Miners in China. Finance Magnates.
- Crypto Giant Bitmain Is Setting Up a Miner Matchmaking Service. Bloomberg.
- Bitmain fulfils commitment to Rockdale, Texas, with launch of cryptocurrency mining farm to construct 50MW facility. Bitmain.
- DMG adds New Industrial Mining Client, Ceases Management of Texas Operation, and Provides Update from recent AGM. Intrado.
- Bitmain’s IPO application expires; company appoints new CEO. The Block.
- 2019’s Focus is on Customers. Bitmain.
- Bitmain’s exiled founder returns in coup. Financial Times.
- Ousted Bitmain Co-Founder Wages Battle for Control in Court. Bloomberg.
- ‘I am firmly opposed to layoffs,’ says Bitmain's ousted co-founder Micree Zhan. The Block Crypto.
- Chinese court freezes Bitmain’s ~$500K worth of stake in its subsidiary. The Block.
- Roger Ver, Bitmain Sued for BCH Hard Fork ‘Manipulation’. Finance Magnates.
- Mining Firm Sues Roger Ver, Bitmain and More for ‘Hijacking’ Bitcoin Cash. Coindesk.
- Case 1:18-cv-25106-XXXX Document 1. United States District Court for the Southern District of Florida.
- Application Proof of BitMain Technologies Holding Company. Hong Stock Exchange.
- Wu Jihan Resurfaces As Bitmain CEO After Co-Founder Is Forced Out. Cointelegraph.
- Jihan Wu is no longer Bitmain's legal representative, public records show. The Block.
- Bitmain Co-Founder Launches Another Lawsuit to Regain CEO Role. Cointelegraph.
- Micree Zhan Reportedly Used Private Guards to Physically Take Over Bitmain. Cointelegraph.
- Bitmain Exec Reportedly Arrested After Street Brawl With Co-Founder. Cointelegraph.
- Court Denies Bitmain $30M in Damages From Co-Founders of Rival Poolin. Coindesk.