Contract Dispute Leads to Over $670K In Frozen Assets Belonging to A Major Bitmain Subsidiary
On 13th December 2019, a District Court in Shenzhen Bao’An read a ruling issued on September 27th siding with Dongguan Yongjiang electronics. The ruling was meant to grant the company asset protection status against its ongoing dispute with Shenzhen Century Cloud Core, which was the defendant in the case.
Yongjiang’s Requests to the Court
Yongjiang had on September 25th this year approached the court asking it to freeze $676,000 (around 4.7 million yuan) in assets believed to belong to this crypto mining subsidiary. The electronic device component supplier made this request to the court so that it would be in a position to claim the said amount in the event that the court ruled in its favor. The two companies had been involved in a protracted contract dispute.
Bitmain Technologies, based in Beijing is the parent company of Century Cloud Core. The firm also happens to be a crucial subsidiary of this crypto mining magnate and is tasked with conducting quality assurance checks, manufacturing, as well as packaging all the bitcoin mining equipment produced by Bitmain. It’s also worth noting that Bitmain is currently the dominant player in the market.
As of now, it’s not yet known for how long this freeze will continue to be in place. According to Chinese laws:
“The freezing of funds and bank accounts should not last for a duration of more than six months. Additionally, any liquid or current assets that have been frozen should not be kept in custody for more than 12 months.”
A Bitmain spokesperson refused to comment on this asset freeze.
For Bitmain, this is not the first time that it is finding itself in this kind of situation. It has in the past also been involved in other purchasing contract disputes in the past.
According to data compiled by CoinDesk, Beijing Bitmain Technologies and Century Cloud Core have faced four different cases since the beginning of the year. All the cases against it have been filed by electronic component providers such as Youda Electronics, based in Hong Kong and Shenzhen.