Bitmain may be Sued by its Investors for Financial Misrepresentation and Omission
Bitmain is still preparing for its initial public offering. As the world’s largest cryptocurrency mining semiconductor, Bitmain’s IPO causes much concerns from the crypto mining community. However, controversy has been swirling around the company over the past few weeks.
There used to be rumors spread of its alarming financial condition. Of late, the controversy went to a new level as rumors appeared online of its investors threatening to sue Bitmain for misrepresenting financial information and material omission.
September 17, a user named BTCKING555 tweeted the rumors of the conflict between Bitmain and its investors on the financial issue. He has also provided an image of an agreement document given out during a meeting in Beijing, which can be a proof that shows the warrantors to the agreement are Jihan Wu and Ketuan Zhan (Micree) and liability of this misrepresentation would spread across group companies including Bitmain Technology, Blocktrail, Hashnest, Tospring, just to name a few.
BREAKING: Rumors – recent investors threatening to sue Bitmain for misrepresenting financial info & MATERIAL OMISSION. Warrantors in the Agreement defined as Jihan Wu and Ketuan Zhan. Also Liable – Group Companies: Bitmain Technology, Blocktrail, Hashnest, Tospring (to name few)
— BTCKING555 (@btcking555) September 17, 2018
Obviously, the authenticity of this information is still worth to be concerned. So far, there is no other individuals or institutions reporting this information. In addition, after going through his tweets, it is not hard to find that BTCKING555 is definitively a “Bitmain bearish”, most of his tweets overreact towards Bitmain and Jihan Wu.
For instance, he also tweeted today that a top Hong Kong lawyer says Jihan and Micree have made a big mistake of giving personal guarantee to investors in the Shareholder Agreement. BTCKING555 emphasized that they misrepresented numbers during the investment round and will pay a “hefty price” for that.
However, if BTCKING555 does have an inside source, this news can be associated with the previous news of Bitmain’s ambiguous financial condition.
As of the press time, the story is not so clear. However, once Bitmain releases its Q2 financial report, everything will come out in the wash.