China Crypto Roundup (April 20- April 26): China Leads Blockchain Patent Applications, Ebang Files for U.S. IPO
This week’s headlines from China include hacker returning dForce the stolen assets, Chinese giants leading blockchain patent applications, global commercial use of the country’s national blockchain platform service network BSN going live, bitcoin miner manufacturer Ebang filing IPO for U.S. stock market listing.
dForce hacker returns stolen $25 million in crypto
The hacker that drained $25 million in cryptocurrency from Chinese decentralized finance protocol dForce last weekend has unexpectedly sent back almost all the stolen assets days after the hack.
The China-based company gained international fame when it received a $1.5 million strategic investment led by Multicoin Capital and joined by Huobi Capital and Chinese bank CMB International. While days later on April 19, dForce, once again, caught the public attention after its lending protocol Lendf.Me saw $25 million in cryptocurrencies exit its wallets.
Though the hacked assets have been sent back, the attack has raised investors’ doubts whether decentralized finance protocol is solid and trustable.
China filed for the most blockchain patents in 2019
China has once again taken the lead in blockchain patent applications in 2019, with 7 out of the top 10 filers coming from China, according to data collated by patent database IncoPat.
E-commerce giant Alibaba and its fintech spin-off Ant Financial, with 1505 claims, filed the most blockchain patent applications. Close behind it in second place is the Chinese social media titan Tencent, with 724.
Earlier this month, Ant Financial launched a consortium blockchain platform to small and micro enterprises to help in the creation of efficient and low-cost blockchain applications.
Blockchain infrastructure building progress fast
After blockchain was officially included in China’s trillions worth “new infrastructure” plan. On April 25, China launched the global commercial use of Blockchain-based Service Network (BSN), which is a permission chain interoperable with public chains and other decentralized platforms including Hyperledger Fabric, Ethereum EOS, WeBan’s FISCO BCOS and Baidu’s Xuperchain.
According to analysts, it will serve as the backbone infrastructure for achieving massive interconnectivity across China as well as with China’s trade partners around the world via the Digital Silk Road.
The network already encompasses around one hundred city nodes around China, with the support of the country’s three main nationwide telecoms providers and framework providers. The Chinese central government plans for BSN to eventually encompass to all of the country’s major cities, with 200 cities to be included in the upcoming year followed by 451 prefecture-level urban centres.
Chinese regulator approves the third batch of 224 blockchain companies
China’s internet regulator, the Cyberspace Administration of China (CAC), has released the second list – 224 companies long – of registered blockchain service providers, according to its April 24 notice. Big names include subsidiaries of Alibaba, Baidu, JD, Suning, China Mobile Walmart China, China Ping An Property Insurance, China Merchants Bank, etc.
The Regulation for Managing Blockchain Information Services was first announced in October 2018 by the CAC, involving censorship and bans anonymous users, which immediately ignited a heated debate among blockchain and cryptocurrency enthusiasts upon its introduction.
According to the regulation, blockchain service providers in China are required to verify real-name registration for users via a national ID or telephone number, barred from using blockchain technology to “produce, duplicate, publish, or disseminate” any content that is deemed to pose a threat to national security and shall store user data to allow inspection by authorities. It unveiled the first batch of 197 registered blockchain service providers last April and the second batch of 309 later in October.
Ebang files for a $100 million U.S. IPO
China-based bitcoin mining equipment manufacturer Ebang International has filed on April 24 with the SEC to raise up to $100 million in an initial public offering.
Founded in 2010, the Hangzhou-based company is one of the world’s largest bitcoin mining hardware makers. It designs and manufactures the Ebit line of ASIC chips used in bitcoin mining. It reported $109 million in revenue during 2019 and plans to list on either the NYSE or the Nasdaq under the symbol EBON.
As the price of bitcoin tumbled in 2018 and part of 2019, Ebang’s profits took a beating, with net loss widening to $41.1 million in 2019 from 2018’s $11.8. If the company’s IPO application goes well, it will be the second mining company to go public in the capital market after Canaan. In 2019, the Nasdaq-listed company Canaan booked $148 million losses.
Under such a volatile market condition, many shrug off the application filed at such a timing, wondering whether the company could make it on the traditional capital market.