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.

Bitmain Unveils US Mining Facility for Digital Assets

Bitcoin mining giant Bitmain has unveiled a new US facility which they claim to be the largest mining facility for Bitcoin (BTC) in the world. Bitmain established the new mining facility with the aim to make it the largest digital asset mining facility across the globe.

According to a press release published on October 21st, Bitmain revealed their new US facility in Rockdale, Texas. The facility stands on a 33,000 acre land owned by Aluminum Company of America (Alcoa). It has been built to a current 25MW capacity, with a 50MW facility remaining under construction. According to Bitmain, the site has been designed to expand its overall capacity six times over to 300MW in the future.

The facility had been developed with the help the Rockdale Municipal Development District and Canadian technology firm DMG Blockchain Solutions, for streamlining its operations at the new venue.

Clinton Brown, Rockdale lead project manager for Bitmain, has stated upon the news release:

“We are excited to launch this facility, which is significant to Bitmain’s global expansion plans. The stable and efficient energy resources in Texas are fundamental to the inevitable scale of growth for the cryptocurrency mining industry.”

DMG, which will provide hosting and management services for the Texas facility, will collaborate with Bitmain to expand the facility’s capacity and ensure the efficiency of the site’s mining operations.

In addition to that, both companies have stated they will work closely to establish the facility’s on-ground team together with the local workforce commission – the Rockdale MDD.

The giant mining firm has also affirmed in the press release that it will acquire materials for the on-going construction from local suppliers in the area to contribute to the economy of the region. Furthermore, the company will also purchase energy directly from Rockdale’s electric grid operator, the Electric Reliability Council of Texas.

According to Sheldon Bennett – COO of DMG and in-charge of Rockdale mining facility – “this mining facility marks a major milestone in the development of the mining farm industry. We are proud to partner with Bitmain, the leading innovator in this sector.”

Aside from supporting the local economy, Bitmain also plans to launch educational programs and training on blockchain technology and mining data center operations in cooperation with the Rockdale school district.

As previously reported, Bitmain’s plans for its Texas facility were first announced in August of last year. At the time, Bitmain stated it had expected to create 400 local jobs within the first two years, citing $500 million as its total planned investment into the economy over an initial period of seven years.

However, at the beginning of this year, local reports alluded that the project was being reduced, with reports of staff layoffs and suspended operations. Adverse market conditions were thought to be the reason for the alleged downscale.

Meanwhile, another Texas-based crypto mining farm – Layer1 – recently secured $50 million from an array of investors with an aim to establish America’s leading crypto mining facility.

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.

Bitmain’s Downscaling Continues as Projects in the U.S. Get Revamped

In most recent news, Chinese leading mining and mining ASIC hardware producer Bitmain has apparently suspended all of its mining activities in their US based headquarters in Rockdale, which is situated in the Milam County east of Austin in the state of Texas.

Bitmain Layoffs

Steve Young, a Milam County Judge, published a statement reporting that all Bitmain employees apart from two engineers and the director of human relations had been laid off, thus rendering all operations suspended.

According to the official report, the judge disclosed later that Bitmain told him that the company would scale down in terms of operation as opposed to the firm completely shutting down. Thereupon, it will involve now a total of five employees, whereas initially it was composed of 15 employess.

In addition to that, Judge Young stated as well that Bitmain had spent millions just to renovate its buildings, further suggesting that the firm now boasts between 7,000 and 8,000 servers.

The county judge claims that it is due to the collapse of Bitcoin’s price as a reason for the revised plans which led the company to lay off most its staff and halt their mining operations.

A Bitmain spokesman cited that

“The right-sized team at Rockdale now has the expertise to re-start the project at small scale anytime. Bitmain would like to ramp up the site at a slower pace and scale based on market conditions.”

The Milam County Judge Young has also talked about the company’s commitment to hire locally and Bitmain insisted on paying the school district taxes as opposed to taking an offered abatement. According to the article, the question remains concerning the 10-year tax break on county taxes on real and personal property.

Big Plans Disrupted by Markets

As previously reported, Bitmain wanted to develop a blockchain data center worth $500 million. This – including a mining facility – would have been built in Texas as part of the company’s goal to expand further into the United States market.

Apparently, media outlets have recently confirmed that Bitmain has been planning to let employees go from various projects. In December 2018, it was reported that Bitmain and major crypto exchange Huobi have apparently affirmed plans to lay off staff. Also in December, news broke out that Bitmain was closing its development center in Israel and letting local employees go.

Furthermore, several Chinese commentators have also claimed that Bitmain has let go of its entire team of Bitcoin Cash (BCH) developers.  It is interesting to see just how this would affect the company’s future, given its presence in the crypto industry.

Bitmain’s Woes Continue as the Firm Plans Layoffs

In most recent news, sources from Chinese media has reported that Bitmain – a global cryptocurrency mining giant, has gone on a layoff spree and intends to lay off almost half of its staff by the end of the week.

According to the reports, Bitmain has laid off today a whole team, which had been working on the development and improvement of Bitcoin Cash client. Reportedly, the news broke out to the wire when Samson Mow, Blockstream Chief Strategy Officer and former BTCC Chief Operational Officer, tweeted about it, citing that:

“Bitmain has quietly laid off their entire Copernicus team. Only 1-week notice. Some had just joined the company. Layoffs just in time for Christmas.”

Following this, rumors started to spread at an exponential speed, gaining more credibility as people, who claimed to be ex-employees of Bitmain, started sharing their exit stories on LinkedIn. Additionally, Sanyan Finance – a Chinese media outlet, has also contacted Bitmain employees for further confirmation. Whilst they confirmed that the HR division at Bitmain has been indeed in talks with employees about “something”, they neither confirmed nor denied whether employees are in the process of a layoff.

Bitmain Trimming its Activity

However, even before the layoff rumor spread, the company had already halted its activities in the State of Israel. According to local news, Bitmaintech Israel, which had been founded just two years ago, fired its entire team, including vice president Gadi Glikberg, citing losses incurred during the latest crypto crash.

In November, the cryptocurrency market cap lost $70 billion worth of investments after Bitcoin Cash (BCH) fork jeopardized the stability of the entire crypto industry. Bitmain, who at that time showed support to one of the Bitcoin Cash camps, led by Roger Ver in its quest to attain lead over the other, had suffered losses worth millions of dollars in the aftermath.

Subsequently, the crypto market crash forced Bitmain to reexamine its activities across the globe and proceed according to the current circumstances.

The crypto mining giant had almost 2,000 employees working across its mining and blockchain development divisions. Although it is currently not known whether or not it is a global layoff, Beijing layoffs are already active, as reported by 36kr. It is expected to drop to 300 by the time the reported layoff concludes.