Bitmain Co-Founder Ousted in Internal Power Struggle

Bitmain co-founder and executive director Micree Ketuan Zhan has reportedly been forced out of the company in a power struggle with business partner Jihan Wu.

Bitmain’s co-founder Wu Jihan announced on Tuesday the resignation of his partner, a move which comes as a surprise to outsiders. The change appears to be the consequence of a power struggle within the largest crypto mining company in the world.

Zhan, who is considered one of the wealthiest cryptocurrency billionaire, was the largest Bitmain shareholder with 36% ownership. Since the company’s delayed IPO this is the second major shakeup at the executive level.

According to Wu’s memo Micree Zhan Ketuan, who started Bitmain alongside Wu six years ago, no longer holds any position at the company, effective immediately.

Jihan Wu also warned employees against taking further instructions from Zhan or attending any meetings, threatening staff with dismissal or criminal charges.

“If employees cause any harm to the company’s economic interests, the company will investigate their civil or criminal liability in accordance with the law,” Wu wrote in the memo, signing off as Bitmain’s co-founder and chairman.

Bitmain’s two co-founders had long served as co-CEOs but were replaced this year by Wang Haichao, in an attempt to reinvigorate the company after the crushing bear market for the cryptocurrency industry as a whole.

The unexpected memo from Wu is sure to stoke more questions around the world’s largest producer of crypto mining rigs, which had previously failed to get listed on the Hong Kong stock exchange.

Bitmain had high ambitions during the filing process, netting a valuation around US$15 billion in a private funding round last year. With the downward pressure on Bitcoin’s price and the uncertain regulatory environment, the IPO failed as the cryptocurrency industry was deemed too risky.

The mining giant also considered a US debut, long before rival Canaan Inc filed for its own American US initial public offering.

It’s yet unclear how Bitmain’s board made the decision and whether Zhan was bought out of his shares. As of September last year when Bitmain filed the IPO application, Zhan was still a major shareholder of Bitmain with 36 percent of Bitmain’s holding company while Wu owned 20 percent.

Europol Have Closed Down Cryptocurrency Tumbler Bestmixer

The Dutch Financial Criminal Investigative Service (FIOD) has shut down one of the three largest cryptocurrency tumblers – Bestmixer.io – in a crackdown involving Europol and other authorities, according to reports from Europol on May 22nd.

Europol has disclosed in a statement Wednesday that the seizure of Bestmixer.io followed an investigation that was initiated in June 2018, making this the “first law enforcement action of its kind against such a cryptocurrency mixer service.” The investigation was spearheaded by the FIOD with the support of the internet security company McAfee, which resulted in police seizing six servers in Luxembourg and the Netherlands.

Cryptocurrency tumblers, also known as a cryptocurrency mixers, operate as an anonymity tool that claims to transform transactions of non-private coins to private ones by mixing crypto funds with others, therefore making it difficult to track the funds’ original source. Typically, coin mixer users pay a fee on top of the funds they send in, receiving back their money from a whole new address.

Bestmixer.io was one of the three largest mixing services for cryptocurrencies and offered services for mixing cryptocurrencies such as Bitcoin (BTC), Bitcoin Cash (BCH) and Litecoin (LTC). The service launched in May 2018 and achieved a turnover of at least $200 million (approx. 27,000 BTC) in a year’s time and guaranteed that the customers would remain anonymous.

The investigation so far into this case has found that a large number of the mixed cryptocurrencies on Bestmixer.io came from criminal activity. For reference, the authorities alleged that the mixer was used to conceal money laundering and illegal financing.

Following this investigation, the Dutch FIOD has collected data on all the interactions on this platform in the past year, which includes IP-addresses, transaction details, bitcoin addresses and chat messages and more. The collected data will now be thoroughly analyzed by the Dutch authorities in cooperation with Europol, and the results of the investigation will be shared with other countries.

Most recently, Europol and German authorities have seized the servers of a dark web marketplace, taking six figures in crypto from the arrested suspects.

At press time, a number of crypto mixers could be found online, including ChipMixer, BitMix.Biz, BitBlender and others.

Bitmain IPO Filing Update Hint at Possible Losses in Q3 2018

Cryptocurrency mining giant Bitmain could have made losses of around $500 million in Q3 last year, according to revealed filing documents of the company.

The Beijing-based company recently provided an update on its financial results to the Hong Kong Stock Exchange (HKEx), which is reviewing Bitmain’s application for an initial public offering (IPO) first filed in September.

According to documents, for 2018 as a whole, excluding Q4, revenue was $3 billion and profits $500 million. This changed significantly in comparison to previous figures for the first half of the year, for which profit was $1 billion.

If the approximated figures are accurate, the conclusion is that Bitmain made a loss of around $500 million in Q3, confirming that the Bitcoin bear market late last year had a hard-hitting impact on the mining sector.

Further, the update provided to HKEX showed Bitmain’s cryptocurrency holdings dropping in value and unverified reports claiming that the amount of assets has also decreased.

The company’s IPO application, filed in late September, indicated that Bitmain mainly held Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Dash, although it did not provide a breakdown of how much it held of each asset.

Bitmain’s IPO filing process, which could raise significant funds for the company, has been fraught with difficulties since the plans have started to make headlines in the cryptocurrency industry in Q2 2018.

HKEX itself added to the doubts in December, with rumors claiming the exchange was unwilling to approve any cryptocurrency offering due to the industry’s volatile nature.

Bitmain had already signaled it had fallen on harder times with layoffs and office closures around the world beginning at the end of the last year that affected almost every unit of the company. Its main businesses are manufacturing mining equipment and operating mining farms and pools – activities that have broadly suffered from the slump in crypto prices.

In the beginning of the year, the company has also undergone a switch at the helm of the company. Jihan Wu has stepped down as CEO, to continue as Chairman, while someone from inside the company has taken his place.

UnitedCorp Files Lawsuit Against Bitmain and Roger Ver for Network Manipulation

United American Corp., a Florida based company, has filed a suit against some of the biggest names in the cryptocurrency market, accusing them of manipulation of the Bitcoin Cash (BCH)  network during and after the November 15 hard fork. According to the press release published on December 6th, the list of defendants in this case includes major cryptocurrency companies such as Bitmain, Bitcoin.com, Roger Ver, and the Kraken Bitcoin Exchange.

Founded in 1992, UnitedCorp serves as a development and management company, with a focus on telecommunications and information technologies. Notably, the company manages a portfolio of patents and proprietary technology in telecoms, social media and blockchain, as well as owns and operates the “BlockchainDomes” which are said to provide heat for agricultural operations using computer equipment in naturally cooled data centers, where efficiency and low-cost operations are a priority.

According to the news, Unitedcorp claims that parties jointly engaged in “unfair methods of competition” to manipulate the BCH network for their own benefit and in detriment of UnitedCorp and other BCH stakeholders. The release further denotes that the plaintiff “believes that the defendants colluded to effectively hijack the Bitcoin Cash network after the November 15, 2018 scheduled software update with the intent of centralizing the network — all in violation of the accepted standards and protocols associated with Bitcoin since its inception.”

Respectively, the lawsuit seeks injunctive relief against the defendants and the termination of speculated ongoing activities against the BCH network now and in the future, as well as it requests compensation, the value of which it claims will be determined at trial.

On November 15th, the BCH network underwent updates, which ultimately lead to dividing the crypto community into two main camps, namely those who support Bitcoin Cash ABC and those who support Bitcoin Cash SV. UnitedCorp claims that the defendants took the opportunity to control the coin’s network right after the upgrade by using “rented hashing.” Supposedly, this led to the approval of Bitcoin ABC rule sets, preventing other implantations from maintaining a democratic rule sets.

Furthermore, UnitedCorp claims as well that a few days later on November 20th, the ABC development team planted a “poison pill” into the blockchain in the form of a “Deep Reorg Prevention” as well as other functionality in order to strengthen and establish the control of the blockchain ledger. This move allows preservation of control on future implementations and any related rule sets for future network upgrades.

Following that, BCH has registered major losses on the day. According to CoinMarketCap, the token is down by over 20% within the last 24 hours and is currently trading at around $103 at press time. Whereas, Bitcoin SV (BSV) has seen notable daily gains of over 27 %, and is presently trading at around $112 at the time of the writing.

The Bitcoin Cash Community Has Completed A Controlled Stress Test Of The Network

The Bitcoin Cash (BCH) community registered a successful stress test run on September 1st by confirming an impressive number of transactions made during a day. According to the statistics, BCH recorded over 2 million transactions in the span of 24 hours, and more specifically 2,060,041 transactions. More impressive is this feat having surpassed the Ripple (XRP with 1.7 million transactions) and Ethereum (ETH with 1.2 million transactions) on their 24 hour processing pace records.

Additionally, data shows how many transactions BCH miners have handled per hour, per second and per block, which one can check on the website Fork.lol.

Certainly, this huge feat has been fervently celebrated by the Bitcoin Cash community, as seen on different websites such as Txhighway.comTxstreet.com, and Bitcoinsubway.cash, other statistics sites like Blockchair, Fork.lol and so on.

Furthermore, aside from the record-breaking transactions per day, another great achievement is miners having processed high mined block size. BCH miners have outperformed their highest mined block size, which used to be 8MB. During the stress test, aside from many 4 to 8 MB blocks, miners have processed as well 9MB, 10 MB, 11MB, 14 MB and the highest one yet 15.2 MB.

Other mining platforms such as Viabtc, BTC.top, Coingeek, BMG Pool, Waterhole, Bitcoin.com have previously recorded blocks larger than 8MB. Nonetheless, this feat for BCH still stands as an enormous achievement. Also, despite the day being such an experiment for the mining platform, it still drastically surpassed BTC (2.51 transactions) on its per second transactions quota, registering 23 transactions per second.

The entire process has also flowed rather smoothly, with participants being able to process thousands of transactions and miners clearing the transaction queue quickly and smoothly. The BCH community fees have also remained low, trading at $0.001 per transaction, which had been lower than usual. Ultimately, the Bitcoin Cash network has experienced a rather successful test and it’s most definitely an encouraging feat for them as their potential could grow in the future.