Bitmain US IPO is on Pause Due to DOJ Investigation of Mining Equipment Sales via Unconfirmed Report

  • Bitmain might not go forward with its US IPO, its competitor Canaan didn’t have much success either
  • The company also terminated its agreement with Texas mining which was supposed to be “the world’s largest for Bitcoin mining”
  • Bitmain is also cutting down its staff ahead of BTC halving, the former executive called this a “suicidal” move

Bitmain’s troubles aren’t showing any signs of slowing down. The latest one came in the form of its US IPO. A critic of cryptocurrency mining giant Bitmain, Twitter user BTCKING555 said that the company is canceling its USA IPO plans.

Apparently, there is an investigation going on into Bitmain selling a huge amount of mining equipment to the Ponzi scheme BitClub. The company that promoted itself as “the most transparent company in the history of the world,” according to the NYTimes, 5 people were charged in New Jersey in this $722 million cryptocurrency Ponzi last month.

It isn’t surprising given that Bitmain competitor Canaan even after slashing its initial IPO target by 75% still falls short of reaching $100 million. Its shares also lost 43% of value in less than a month of its launch. The BitMEX report says,

“Canaan has been recording five consecutive quarterly losses and is further expected to generate a significant loss in 2019.”

“The world’s largest for Bitcoin mining” Farm already Down

Just last week, Bitmain terminated its management agreement with its Texas mining farm last week. The Vancouver-based DMG Blockchain said the mining farm has already 15,000 “next generation” miners installed but failed to materialize the “cost and operational efficiencies” which has been the reason for its termination.

Launched in Oct. last year, the company claimed the new farm would be “the world’s largest for Bitcoin mining” with a capacity of more than 300 MV.

Cutting Down Staff Ahead of Bitcoin Halving

There have also been reports that the BTC mining hardware manufacturer is cutting half of its staff ahead of having after the reports of disgruntled employees’ protesting emerged online. With the Chinese New Year coming, January 25, the timing couldn’t have been worse. Primitive Crypto founding partner Dovey Wan tweeted,

Former CEO says the Move is “Suicidal”

While the company is getting ready to reinvent itself for the new year by cutting out its workforce, former CEO Micree Zhan called this move “suicidal.”

Zhan who was ousted from Bitmain last year and is currently engaged in legal proceedings in an attempt to regain control of the company, said in a social media post that he is “firmly opposed” to the decision.

The action, according to him is “unreasonable” because “Bitmain’s cash flow is healthy, and there are huge amounts of virtual currency assets.” He believes the company can hold onto its 1300 employees.

The potential layoffs already started last month with Bitcoin halving, scheduled for May 2020, as the main driver behind this move.

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