Report Suggests Ebang Crypto Mining Company’s IPO is No More Due to Illegal Financial Practice Allegations
The IPO process of crypto mining equipment manufacturer Ebang International on the Hong Kong Stock Exchange has reportedly been stopped by investigators looking into the case. Hong Kong-based prosecutors have apparently found that the company was involved in illegal financial practices.
Earlier this year, Ebang had filed for an IPO listing on HKEx. If things had gone per the company’s plan the listing was scheduled for October 16th. However, they had been caught for unlawfully using over $71 million of funds in the listing process.
Ebang International was started with an intention to improve the non-existent competition within the mining industry. Currently, the company claims to have an 11% market share of the bitcoin ASIC mining industry. Their revenue has increased an astounding 30 times in the past 3 years. In 2017, their profit was estimated to be around $55 million.
Currently, the company is being accused of taking upwards of 500 million Yuan from Yindou.com for money laundering, inflating sales revenue and collecting false sales contracts. On October 13th HKEx forwarded these findings to the listing department who are now looking if further action needs to be taken. Additionally, the Hong Kong Police Force and Joint Intelligence Intelligence Unit are looking into the case.
Notably, Ebang had previously informed about a loss of 144.9 million yuan due to a failed relationship with Yindou.com. The details about these transactions remain hidden. However, supporters of Yindou.com say that these illicit funds are coming from fraudulent investors.
Bitmain is another Chinese mining company who are in deep trouble ahead of their IPO. Even though financial giants such as Soft Bank, Tencent, and DST Global were heavily rumored to have invested in the first round of pre-IPO funding, it has since been uncovered that these rumors were false. And nor would they after the growing accusation about financial malpractice and misreporting.