Bitmain’s power struggle continues as Bitcoin Rush Micree Ketuan Zhan, one of the co-founders of the crypto-mining giant and the largest shareholder, made an offer to buy shares controlled by his colleague and co-founder Jihan Wu and others for $4 billion.
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According to a letter sent to Chinese media Jinse on June 21, Zhan says he currently holds 36% of the shares of the parent company in the Cayman Islands, which owns Bitmain Hong Kong and controls Bitmain’s offices in Beijing. His current shares give him 59.6% of the voting power.
The letter states that Zhan is willing to buy Wu’s shares, as well as shares from outside investors, the employee option pool and three unidentified individuals for $4 billion.
The fight for control continues
Bitmain’s co-founder was already its largest shareholder when Wu allegedly forced him out of the company in October 2019 in an apparent attempt to control it, an action Zhan referred to in the letter as an „illegal attack.
After Zhan was fired, the mining giant went on the offensive, publicly declaring that he had no right to act as legal representative of Bitmain or issue warnings and instructions to company employees. There have also been reports of legal action against Zhan.
Zhan retaliated in some way, filing two lawsuits against the various Bitmain entities in an attempt to regain his position. In the letter, he accuses Wu of spreading rumors, sending a group to steal a physical copy of his business license and concealing the company’s assets.
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Zhan allegedly took over the company’s Beijing office in May with a security team, even though this office is still under the control of Bitmain’s Cayman Islands parent company, which is managed by Wu.
Zhan urged Wu to return to the negotiating table and rely on the rule of law, rather than resorting to media battles.
Manufacturing was affected
In the midst of this power struggle, the company had problems with the mining equipment it manufactures, including reported failures in the Antminter T17 miners. Although Bitmain’s new Antminer T19 was launched on June 1, the same chips were used in previous models.
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This project could be related to Wu’s suspension of the supply of chips to the Bitmain factory in Shenzhen, which is supposedly under the control of Zhan’s relatives.
Valuation of the company
The manufacturer of crypto coin mining machines cost nearly $12 billion in August 2019, before this fight for control impacted Bitmain’s leadership, manufacturing and media coverage.
Bitmain told Cointelegraph in May that things may be getting better by 2020. The company earned more than $300 million from January to April and regained market share, opening four mining facilities, even in the midst of the global pandemic.