Jihan Wu, Former Bitmain CEO, Aims to Launch New OTC Trading Business Matrix Within A Month
- New Matrix platform from Jihan Wu could launch within the month.
- Several sources spoke to the Block regarding who could be in charge of the new business and what it means for China.
Having a leg up on the competition often requires a little bit of secrecy, which is exactly what Jihan Wu is doing with his new project. The Block says that Wu has been less than informative about what he has in store, but there have been four different sources near the matter that claim the launch of this project will be within the next month.
The new business, which is a crypto-services platform called Matrix, is allegedly already speaking with prospective clients around the world, though none of these clients are in the United States. Bitmain itself is planned to be the biggest customer, and some sources are speculating that Matrix will be providing lending and custody solutions to the Bitcoin mining firm.
One source that The Block referenced said:
“Put it this way, they will be the biggest OTC desk and asset-manager [in the world] overnight. With liquidity like that, [low] prices follow.”
The source added that, considering how “price sensitive” the Asian market is, Matrix will have a significant advantage competitively.
Even though some rumors claim that Matrix is the result of a spat between Wu and Bitmain’s co-founder Micree Zhan, the fact that Bitmain will be such an integral part of their clientele could put that allegation to rest. Bitmain’s investment director, Cynthia Wu, is believed to be working closely with Matrix. A source told The Block, “Relations are great between the two.”
Before creating this spin-off company, Bitmain was already working on a trading and custody department within their platform. However, this opportunity arose as a way to create an entirely separate entity in February.
At this point, despite efforts by The Block, Bitmain has not provided any comment on the matter.
At this point, the actual position that Wu will end up taking on with Matrix has not been announced, though there are more rumors to suggest that his current role is as “Chairman,” which two sources confirmed.
A local news media outlet in China said that Wu will end up as the CEO when everything is in place, even though he is presently a director with Bitmain at the moment with a 20.5% stake in the firm. Last year, the firm reported a $500 million loss in the third quarter of the year.
Right now, Wu and the co-founder on this project are some of the richest individuals that are in the cryptocurrency industry right now with billions in their accounts. However, there is one source that suggests that Matrix could be nothing more than an exit strategy for Bitmain, considering the pressure to liquidate the latter’s shares.
So far, it is unclear if the Chinese government will be welcoming to Matrix, considering the current ban on crypto trading. Most likely, Matrix will end up having an offshore holding company, but there are some sources that suggest it will be able to operate in China if it collaborates with the government to form a monopoly.
However, other sources believe that the approval to act in the country would be more lowkey. The source said:
“It’s more of a ‘if we can’t beat them, how do we direct them’ attitude.”
Even if Matrix finds themselves unable to operate in China, the area is ready to see a new competitor in the space, pushing against platforms like Coinbase and BitMEX. The source added, “This is going to make Asia the new centre of gravity for crypto OTC.