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Chinese Bitcoin Mining Giant Bitmain Has Secretly Filed IPO in the U.S. Amid its Power Clash

Chinese bitcoin mining giant Bitmain has confidentially filed for an initial public offering (IPO) in the United States, according to Tencent News on October 30.

Tencent reported that the world’s largest crypto mining equipment manufacturer, underwritten by Deutsche Bank, has secretly filed an application with the U.S. Securities and Exchange Commission (SEC) a week ago.

IPO attempt in U.S. amid 2019 bitcoin price revival

To make its U.S. listing more likely to succeed, the company has hired Yeeli Hua Zheng, Nasdaq’s ex-Chief Representative in China, to provide consulting supports.

Bitmain had sought to go public in Hong Kong in September 2018, but faced major headwinds for cryptocurrencies’ price volatility and regulatory pressure amid the crypto sluggish, which ultimately resulted in the company letting its Hong Kong IPO application expire on March 26, 2019.

Seeing soaring demand for crypto mining machines amid bitcoin price rally since this April, the crypto miner mega-seller revisited its plan of launching an IPO this June.

Two days ago on October 28, its competitor Canaan has officially filed to be a publicly-traded company in the United States with a raise target of $400 million.

Engulfed in power clash

The news came on the heels of a surprise ousting that appeared to resolve a strive for control of the world’s largest crypto mining company.

On Tuesday October 29, Micree Zhan, who started Bitmain with Wu six years ago, was dismissed without even knowing it while he was thousands of miles away from its Beijing-headquartered company attending an expo releasing the company’s latest AI (artificial intelligence) server.

In an emergency meeting with all staff after announcing the dismissal of Zhan, Wu was reportedly recounting Zhan’s mismanagement, comforting employees and urging them to unite to save the company and not go further down the wrong path.

According to Tencent’s report, the direct fuse for the Bitmain “coup” was the second annual adjustment of organizational structure led by Zhan, which caused a large-scale layoff of senior staff who has served the company for years. Plus Zhan’s extremely diligent, hands-on and controlling nature, panic staff began to ask Wu to come back to quell all these.

Bitmain’s two co-founders had long served as co-chief executives, but “the duo has been divided on the company’s future development since 2018 when the company was suffering cash crunch triggered by the sluggish crypto market and the setback of its failed Hong Kong IPO. Zhan took issue with Wu on his big move on Bitcoin Cash (BCH) and proposed to focus on AI business. Wu then chose to give in and let Zhan lead the company,” citing a person close to Bitmain.

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Jihan Wu (left) and Micree Zhan (right)

However, since Zhan came to the stage, the company’s situation has not been improved, even amid the crypto market revival in 2019. On one hand, Whatsminer, a crypto miner manufacturer founded by Antminer S9 developer, has risen to be a competitive rival in mining machine development and production; for another, its mining pool dominance was replaced by F2Pool and Poolin, while Zhan was obsessed with AI business. Under such circumstances, shareholders begin to be impatient and unsatisfied with the company’s performance.

As the company’s official seal has been kept by Wu’s assistant since his leave in March 2019, Wu was able to successfully change the company’s legal representative and executive director into himself which shall be registered with local authorities if there’s any change.

The report added that Wu acted decisively without prior notice to any shareholders. But some outside shareholders tend to support Wu; internally, Wu also has also won the support of senior executives and employees, including CFO Liu Luyao, HRBP Suo Chao, shareholder and newly appointed supervisor Ge Yuesheng.

As of press time, Zhan who has been expelled from the company has made no response. People close to Zhan revealed that he had been consulting lawyers and prepared to take legal action.

Amid the power clash, it remains to be seen whether Bitmain’s U.S. IPO will go successfully considering the company is currently in turmoil.

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