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Chinese Listed Company Racked in 22 Million Yuan by Reselling Bitcoin Miners Overseas

A publicly listed Chinese company named Wholeasy has racked in more than 22 million yuan ($3.2 million) in 2018 by reselling bitcoin mining machines to overseas customers, according to local securities news outlet Securities Daily.

The Shenzhen-listed tech company Wholeasy has been reportedly participating in the bitcoin mining industry under the veil of secrecy. Its subsidiary Beijing Xincailiang Technology Co., Ltd. was the biggest customer of leading bitcoin miner manufacturer Ebang (Ebit miner maker), contributing 17.7% of Ebang’s miner sales in the first half of 2018, as the prospectus of Ebang showed.

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The company’s foray in blockchain seems to have raised the regulator’s concerns. In a response to the Shenzhen Stock Exchange’s inquiry about its subsidiary Xincailiang’s business model and financials, Wholeasy replied that Xincailiang has been engaged in bitcoin miner procurement – a business whose risks are controllable, it continued explaining that the company believes blockchain infrastructure services are a trend in future.

Since most of bitcoin miner manufacturers are based in China, miner investors around the world would come to China for bitcoin miners. In such a context, the company grasps the opportunity to resell these digital gold producers overseas.

As financial figures show, the company has racked in 22.34 million Chinese yuan (roughly $3.3 million) in 2018 by reselling bitcoin mining machines to overseas clients, a gross margin of 100%.

While the company had expected more than that. As per the contact between Xincailiang and its miner supplier Ebang, the former actually ordered 100,000 units of E9+ (5,040 yuan per unit) from Ebang with 400 million yuan prepaid, but it only received 65,000 units (corresponding payment is 327.6 million yuan) in 2018, so it brought a lawsuit against Ebang asking the latter to return the overcharged payment.

The company, who took on the bitcoin bandwagon in late 2017 when the great surge in bitcoin price resulted in increased demand for bitcoin mining machines but supplies fell short, seems to make a profitable decision by reselling bitcoin miners despite the bear in the following 2018. While another listed company lost over $23 million in mining bitcoin. As the Bitcoin bull runs again, more listed companies may be considering participating in the industry. Sensing the big money’s increasing interest in bitcoin mining, Dovey Wan, cofounder of Primitive Ventures, recommeds renting hash rate.

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