MORE Bitmain IPO Drama Surfaces As Investors Allegedly Threaten To Sue For Financial Misrepresentation And Omission
Controversy has been swirling around Bitmain this past week. Today, the controversy went to a new level as rumors appeared online of investors threatening to sue Bitmain for misrepresentation of financial info and material omission.
That report comes from BTCKING555 (@btcking555). Earlier today, that user tweeted documents received from “an insider” at meetings in Beijing.
BREAKING: Rumors – recent investors threatening to sue Bitmain for misrepresenting financial info & MATERIAL OMISSION. Warrantors in the Agreement defined as Jihan Wu and Ketuan Zhan. Also Liable – Group Companies: Bitmain Technology, Blocktrail, Hashnest, Tospring (to name few)
— BTCKING555 (@btcking555) September 17, 2018
Here’s what BTCKING555 had to say:
“BREAKING: Rumors – recent investors threatening to sue Bitmain for misrepresenting financial info & MATERIAL OMISSION. Warrantors in the Agreement defined as Jihan Wu and Ketuan Zhan. Also Liable – Group Companies: Bitmain Technology, Blocktrail, Hashnest, Tospring (to name few)”
As “proof” BTCKING555 tweeted an image of the document given out during today’s meetings in Beijing. That document excerpt names the warrantors and other liable parties.
Obviously, you need to take all of this with a grain of salt. As far as we know, BTCKING555 is the only person reporting this information, and it’s entirely possible he just concocted the document to capitalize on recent hype. If true, however, and the user really does have an inside source, then it confirms some of the information reported this past weekend.
Back in August, it was reported that Bitmain was encountering problems during the pre-IPO phase. Namely, investors in pre-IPO discussions were threatening to pull out after new information about the company was revealed.
It’s possible that this latest news is related to this issue. According to the new report, investors involved in the pre-IPO funding round are now threatening to sue Bitmain after the company failed to disclose information about its finances and assets.
Is Bitmain Going Bankrupt?
This past weekend, it was reported that Bitmain was facing bankruptcy due to a litany of problems. Despite earning over $4 billion in profit in 2017, Bitmain has encountered significant growing pains. These growing pains have forced them to rush into an ICO, according to sources online, with some even suggesting that Bitmain is nearing bankruptcy.
The sources online cite various problems with Bitmain. The Chinese crypto mining hardware giant made a huge investment in Bitcoin Cash (BCH) that has gone poorly, for example. Bitmain has also failed to release a new, efficient chip – like a 7nm chip – since the release of the S9 two years ago. Yes, the S9 continues to dominate 70% of the bitcoin mining market, but Bitmain is facing new competition from Chinese mining competitors who have successfully created a 7nm chip.
For all of these reasons and more, Bitmain might be encountering significant difficulties. After the bankruptcy news broke, we now have news about investors threatening to sue Bitmain. It’s unclear if any of this is true – but clearly, Bitmain needs to answer some questions in order to assuage investor concerns.