Cryptocurrency Mining Giant Bitmain Announces South America Partnerships

Cryptocurrency mining giant Bitmain has announced that is expanding its distribution in South America by partnering with two digital asset mining consulting firms.

In a press release from December 12th, Bitmain confirmed the appointment of Fastblock and Bit5ive – two cryptocurrency mining firms – as the official Antminer distributors in South America.

According to the news, Fastblock will serve as the primary distributor in Brazil. Founded in 2013, the firm provides major crypto mining services, including selling, hosting and supporting crypto mining hardware.

Bernardo Schucman, co-founder and CEO of Fastblock, has expressed great excitement at the opportunity to work alongside Bitmain, stating:

“We are excited to be bringing our blockchain knowledge from managing over 20 mining plants since 2014 to Antminer customers in the region. We are also able to guarantee the best prices and have a highly skilled team that can advise on the most cost-effective solutions for any mining project.”

Meanwhile, Miami-based Bit5ive will be distributing Antminers to over 30 countries in Latin and Central America as well as the Caribbean.

Robert D. Collazo Jr, Bit5ive co-founder and chief executive, stated that that the official distributor license will help strengthen the trust South American miners have in Antminer’s sales process. He further added that the team at Bit5ive looked forward to its partnership with Bitmain.

Following the announcement, Bitmain excecutive Irena Gao commented on the new partnerships and its decision to expand in the South American market, explaining:

“South America continues to be an important region for the cryptocurrency mining sector. Our collaboration with Fastblock and Bit5ive will help us to build on the relationships we have with the mining community on-the-ground and instill trust in the sales process of Antminers.”

Based in China, Bitmain is the largest manufacturer of ASIC-based Bitcoin mining chips. In addition to that, it is also the only company making the 7 nano-meter-based mining chip which is considered to be very efficient.

In the meantime, following multiple failed attempts in Hong Kong, Bitmain filed for an initial public offering (IPO) in the United States.

The news comes amidst new reports, which reported that Bitmain’s market share by hashrate had dropped from around 70% to 66% from June to early December 2019. The figures were reported in a study, called “The Bitcoin Mining Network” published by London-based digital asset manager CoinShares. Concurrently, Bitmain’s own estimations allege that the company’s market share accounted for 75% of the global crypto hardware market as of 2017.

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.