Hong Kong Stock Market Regulator ‘Reluctant’ to Greenlight Bitmain IPO, Sources Report

Hong Kong stock market regulator is reportedly reluctant to allow Bitcoin mining equipment manufacturer Bitmain to conduct an initial public offering (IPO) in the city. Local English-language newspaper South China Morning Post (SCMP) made this claim in an article published Dec. 19, with reference to anonymous sources.

Citing two “sources familiar with the matter,” SCMP poured more cold water on the plans of mining giant Bitmain to go public, just a day after the Hong Kong Stock Exchange (HKEX) told Cointelegraph that any hesitation on part of the company was “rumors.”

According to the publication’s sources, Hong Kong’s stock market regulator thinks it is “premature for any cryptocurrency trading platform – or business associated with the industry – to raise funds through an IPO in Hong Kong before the proper regulatory framework is in place.”

As a result, SCMP suggests, current conditions “could be an insurmountable hurdle” for Bitmain and other cryptocurrency companies planning to launch an IPO.

Controversy has surrounded the mining giant’s IPO plans ever since rumors about them leaked into the community earlier this year.

Various factors — such as alleged poor sales — have already contributed to doubts about the likelihood that the IPO will be successful.

HKEX meanwhile repeated its refusal to comment on the Bitmain case when queried by SCMP.

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Bitmain Faces $5 Mln Lawsuit for Allegedly Unauthorized Mining at Clients' Expense

Crypto mining giant Bitmain is facing a class action lawsuit of $5 million that alleges it mined cryptocurrency for its own benefit on its customers’ devices. The filings were published under docket listings for the North District Court of California, Nov. 19.

The lead plaintiff, Los Angeles County resident Gor Gevorkyan, has leveled his lawsuit against Bitmain’s U.S.- and China-based entities, alleging that the company is benefiting — without authorization — from the lengthy “initialization” period that its ASIC [Application-Specific Integrated Circuit] devices need for set up:

“Until the complicated and time-consuming initialization procedures are completed, Bitmain’s ASIC [Application-Specific Integrated Circuit] devices are preconfigured to use its customers’ electricity to generate crypto currency for the benefit of Bitmain rather than its customers.”

In Gevorkyan’s case, the filing states he purchased Bitmain devices, including its S9 Antminer machine, in January 2018. The product was reportedly “difficult to configure” and during the “substantial amount of time” that lapsed before he could fully initialize his devices, they operated at cost-intensive “full power mode,” at his expense.

The filing states that “the ASIC devices were mining crypto currency from the moment Plaintiff started the device and it would transfer any electronic crypto currency mined to Defendant.” This allegedly continued until the devices were associated with Gevorkyan’s personal account.

The lawsuit thus accuses the company of engaging in “an unfair business practice,” and of having “unjustly enriched” the firm by converting the use of its customers’ ASIC devices and electricity, thereby causing “ascertainable and out-of-pocket losses.”

Gevorkyan is seeking damages in excess of $5 million on behalf of all miners “similarly situated” as Bitmain clients.

The lawsuit comes at an eventful time for the mining titan; its China-produced mining rigs are likely to be affected by recently imposed U.S. sanctions on Chinese goods; something that would be particularly burdensome, as according to the company’s pre-Initial Public Offering (IPO) prospectus, foreign sales accounted for 51.8 percent of its total revenue in 2017.

On the eve of its IPO — which aims to raise anything from $3 billion to $18 billion — Bitmain has become mired in a series of difficulties.

As the fallout from the Bitcoin Cash (BCH) hard fork continues, the hardware manufacturer could face serious losses after having invested a significant amount of its funds in the asset. Moreover, the company’s pre-IPO triggered controversy as alleged participants, such as SoftBank, Termasek and the Chinese IT-giant behind WeChat, Tencent, officially denied their participation.

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Bitmain IPO: Trial by Fire for the Mining Equipment Giant

The views expressed here are the author’s own and do not necessarily represent the views of Cointelegraph.com

Bitmain, the world market leader for mining equipment, on the eve of an epic IPO — which could become the largest in the entire history of the IT market — is experiencing an equally epic publicity and information attack. Despite the fact that the upcoming IPO is getting closer, as demonstrated by a draft application for registration recently filed by the company on the Hong Kong Stock Exchange, its success may be questionable. 

The fact is that, since Aug. 21, official refutations have started to appear on the internet from companies that were previously listed in the Bitmain investor list. Beginning with SoftBank, the rumor about participation in the company’s IPO was also denied by DST Capital.

Without making unequivocal conclusions, let’s try to figure out whether there is any smoke when it comes to Bitmain’s IPO claims — to which its founder, Jihan Wu, prefers not to respond.


On June 6, media presented information that Bitmain’s IPO on the Hong Kong Stock Exchange was scheduled for September 2018 and, according to investment analysts, was expected to raise anywhere from $3 billion to $18 billion, thereby becoming the largest initial public offering in the IT market’s history, beating Facebook with its $16 billion.

However, on August 6, the company gave a more cautious outlook on the IPO date, taking the gap between the fourth quarter of 2018 and the first quarter of 2019. Nevertheless, a draft application for the listing on the Hong Kong Exchange indicates that the giant’s intention is getting stronger and the date for the launch of the initial offering is getting closer. Additionally, as part of the approval process, Bitmain has submitted a prospectus where it reported new financial data which was closed before.

According to the updated information, Bitmain earned $701 million in net profit in 2017, while various estimates show that the annual income for the same period ranged from $1 billion to $4 billion. A gross income claimed for the first half of 2018 exceeded the one received for the whole previous year and comprised $743 million, despite a significant fall in the crypto market.

However, according to the report published by BitMEX at the end of August, Bitmain could face “visible losses, which might be caused by “allegedly investing the majority of its operating cash in 2017 in acquiring Bitcoin Cash (BCH).” Experts believe the estimated potential losses could reach $328 million.  Additional calculations show that the ratio of the $2.5 billion revenue to the $701 million net profit in 2017 is more positive than that of 2018 ($2,5 billion and $743 million). Further analysis made by the BitMEX team implies “Bitmain are currently loss-making, with a negative profit margin of 11.6% for the main S9 product and a margin of over negative 100% on the L3 product.”

Given the continuing decline in Bitcoin’s price and the challenging situation in the mining hardware market, some experts suggest that the company’s IPO may become a challenging task. Although the corporation still remains the industry leader, with 60-70 percent share of the ASIC production market.

As of the beginning of October, the capitalization of Bitmain has reached $12 billion with its latest funding round in August 2018 reported to be $442.1 million. In total, Bitmain has raised $784.8 million to date and was rumored to have accumulated around 51 percent of the Bitcoin network hash — or that it was at least close.

One of the reasons the research group Sanford C Bernstein & Co. is given as an argument on why Bitmain may strongly need to start its IPO, is increased competition. Wall Street may also be occupied by the company Chinese Canaan Inc., whose value is estimated at about $500 million and Ebang International Holdings Inc., registered in the Cayman Islands. Both companies also announced an IPO with plans to begin before the year ends, which will also take place on the Hong Kong Stock Exchange. According to Reuters, Ebang is planning to raise up to $1 billion, while Canaan is targeting at least $400 million, which in total is 2 times smaller than the sum planned by Bitmain.

The challenges Bitmain is facing

In the middle of the summer, the media reported that Bitmain had held its first round of the pre-IPO and that among the investors there was a co-owner of Uber, Japanese SoftBank and Chinese IT giant Tencent, which developed the WeChat platform. WeChat itself is reported to be ahead of Facebook in terms of capitalization with the market valuation of $534,5 billion against $519,4 billion. Later, the insider information was released about DST Global participating in the pre-IPO.

Neither references to Bitmain’s publications disseminating information, nor the company’s comments on these data were provided. Information was distributed in Twitter with a reference to an investor deck screenshot.

By August, all three companies named originally as investors in Bitmain’s pre-ICO, have issued public denials. But this was only the beginning.

In late August — theoretically on the eve of September’s IPO, the analytical agency Sanford C. Bernstein & Co., which in 2000 merged with Alliance Capital, published a detailed report analyzing the challenges of Bitmain’s IPO.

The study is devoted to Bitmain and contains clear indications of the Chinese giant’s loss of technological advantage, connected with increased competition and the purchase of a large amount of Bitcoin Cash, which could pose a significant risk to the company if the digital token declines. Moreover, Bloomberg, which detailed the report of Sanford C. Bernstein & Co., pointed out that analysts directly called for Bitmain’s technological partner — Taiwan Semiconductor Manufacturing Co. — not to produce chips for ASIC-miners without a full prepayment.

Meanwhile at the Bitmain headquarters

The Chinese giant is consistently expanding its mining empire. In August, Cointelegraph reported that NVIDIA left the mining equipment market, unable to withstand the severe competition of Bitmain. Thus, it appears that 85 percent of the world’s mining equipment production market has come under the control of Bitmain, a figure with which the analysts of Sanford C. Bernstein & Co. agree.

More questions are raised by the above mentioned purchase of BCH, which according to some users, was either a risky investment, given the unstable market situation, or was made with the purpose of not disclosing Q2 income.

At the presentation for investors, Bitmain reported that, since the end of 2017, it consistently traded Bitcoin Cash for any available Bitcoin, despite the fact that the company lost about $500 million. A slide taken from an investor deck was published in Twitter, and caused a stormy reaction in the crypto community.

While information about the future IPO and the monopolized market was teeming with passion, Jihan Wu himself shared his opinion regarding the futility of ICOs and the prospects for Bitcoin Cash in an interview with Coingeek.

An imperturbable 32-year-old Chinese billionaire called ICOs “a bubble that will last for two years and then burst,” followed by the securities of crypto startups released on the blockchain. The Bitmain owner predicted a rate of $100,000 of Bitcoin’s fork — Bitcoin Cash (BCH) — and a dominant position in the market by 2023, as he believes only BCH corresponds to the real vision of Satoshi Nakamoto. Having intrigued Bitcoin evangelists in this way, Jihan Wu completed the interview without commenting on the prospects of his future IPO.

Possible scenarios

Bitmain has accumulated a lot of BCH, but there is no liquid market and there is no demand outside the market. A lot of ASIC-devices were released, but their profitability decreases as the complexity of BTC mining grows. So far the company has not developed any AI initiatives since the moment Jihan mentioned his plans to take on Nvidia.

The IPO process may be hindered by some of Bitmain’s mistakes, such as “producing too many units and buying too many speculative altcoins in a bull market,” BitMEX analysts say. Still they are not so catastrophic and “typical” of mining producers management teams.

The exchange specialists predict that in order to keep their industry dominance and achieve higher results, “the Bitmain management team may need to improve their management of company resources. Once the company goes public, capital allocation decisions in this volatile and unpredictable market will be difficult enough, letting emotions impact too many investment decisions may not be tolerated.”

Perhaps, the giant will reconsider their target sum for the IPO due to revealed losses, and increased competition.

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BitMEX Research: Future Success of Bitmain Depends on Skilled Management

A research unit for crypto exchange BitMEX analyzed recent data on Bitmain which was leaked to Twitter earlier this week. According to the report published on BitMEX blog Thursday, August 30, the Chinese mining giant has “legendary” potential, but future success will depend on skilled management.

Discussing the source of leaked Bitmain financial data — apparently a Twitter account @brian_trollz — BitMEX states that it has “reason to believe the authenticity of these documents.”

According to the research, one of the most interesting discoveries in leaked pre-Initial Public Offering (IPO) documents is that Bitmain’s mining farm business has significantly declined. While mining activities consisted of 18.4 percent of Bitmain’s total revenue in 2016, BitMEX states that, in the first quarter of 2018, the percentage of Bitmain’s revenue from mining was 3.3 percent.

BitMEX notes that Bitmain is highly likely facing visible losses, which may be due to allegedly investing the majority of its operating cash in 2017 in acquiring Bitcoin Cash (BCH). The report estimates potential mark to market losses of $328 million.

BitMEX stressed that, despite rumours surrounding the company’s IPO, Bitmain “is likely to be the largest and most profitable company in the blockchain space, which is likely to make the company attractive to many investors”.

As BitMEX has learned from the leaked data, Bitmain has just conducted a pre-IPO round that allegedly raised approximately $14 billion, leading them to believe that it could raise no less than $20 billion at the IPO stage.

Bitmain still remains one of the largest players on the mining equipment market, the experts continue. It is considered by BitMEX to be the dominant company in ASIC design and mining machine distribution, and also owns BTC.com & Antpool — two of the largest mining pools.

In conclusion, BitMEX expresses cautious optimism on Bitmain’s future prospects:

“Bitmain can be a legendary crypto company, generating strong shareholder returns for decades to come, but in order to achieve this (and it’s a lot harder than it sounds) the Bitmain management team may need to improve their management of company resources. Once the company goes public, capital allocation decisions in this volatile and unpredictable market will be difficult enough, letting emotions impact too many investment decisions may not be tolerated.”

Cointelegraph earlier reported that there had been a lot of rumour,conjecture, and uncertain information around Bitmain’s upcoming IPO. Though DST Global and Japan’s SoftBank were initially listed among possible investors, they have since denied their involvement.

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DST Global Denies Bitmain IPO Investment Few Days After SoftBank, Tencent’s Involvement Called Into Question

Investment firm DST Global has confirmed that it “has never invested” into the cryptocurrency mining giant Bitmain’s pre-IPO in an email to Cointelegraph August 21.

Cointelegraph received an anonymous tip today, claiming that DST Global has not participated in Bitmain’s $400 million funding round earlier this year, despite reports to the contrary.

After being asked to confirm the rumour, John Lindfors, a managing partner at DST Global, has said this in an email to Cointelegraph today:

“I can confirm that DST has never invested in Bitmain.”

The news follows days after another major player, Uber’s largest investor SoftBank, told Cointelegraph that reports about its participation in Bitmain’s initial public offering (IPO) were also false.

“Neither the SoftBank Group Corp. nor the SoftBank Vision Fund were in any way involved in the deal,” a spokesperson said August 18.

Also today, Chinese multinational Tencent has allegedly denied involvement in Bitmain’s IPO, according to a Hong Kong news outlet AAStocks.

According to the publication, China’s largest technology entity by market cap confirmed that “the company did not take part in the investment of Bitmain Technologies.”

As of press time, Tencent had not responded to requests from Cointelegraph to confirm the AAStocks report.

The news nonetheless increases the already controversial nature of Bitmain’s IPO plans, which centers on the company’s Bitcoin Cash (BCH) holdings, rumoured poor Q2 sales and the general underperformance of cryptocurrency markets this year.

Cryptocurrency industry and well-known community commentators reacted warily to a pre-IPO investor deck disclosure earlier this month, Blockstream CSO Samson Mow describing the planned flotation as “incredibly risky for any investor to buy into.”

“They purposely didn’t include the Q2 numbers for Pre-IPO buyers since they were a disaster… They told Pre-IPO buyers they would use some of the money to buy more BCH,” commentator WhalePanda meanwhile added during a Twitter debate before the SoftBank news.

As of press time, Bitmain has not responded to Cointelegraph’s request for commentary.

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Uber's Largest Shareholder SoftBank Denies Deal With Bitmain, Other Investments Uncertain

An official from SoftBank has denied their involvement in the investment deal with Bitcoin (BTC) mining behemoth Bitmain that was reported last week by both crypto and mainstream media sources.

As previously reported, Bitmain had allegedly sealed a pre-Initial Public Offering (IPO) financing deal which had brought its valuation to $15 billion. Both Chinese tech conglomerate Tencent and Japan’s SoftBank — another tech giant whose 15 percent stake in Uber makes it the drive-hailing app’s largest shareholder — were purportedly involved.

After receiving an anonymous tip that Tencent and SoftBank were not actually involved in any deal with Bitmain, Cointelegraph reached out to SoftBank and Tencent for confirmation.

As a response to Cointelegraph’s request for information, Kenichi Yuasa of the Corporate Communication Office of SoftBank Group Corp. stated:

“Neither the SoftBank Group Corp. nor the SoftBank Vision Fund were in any way involved in the deal.”

Despite numerous requests for clarification, no one at Tencent has denied or confirmed the deal to Cointelegraph.

In response to a media request from Cointelegraph, Bitmain refused to comment on the matter.

The original story on SoftBank and Tencent’s participation in a deal with Bitmain was reported by Chinese publication QQ on August 4. In a Google Translated version of the article, QQ stated:

“The mainland officially completed the Pre-IPO round signing. This round of investors includes Tencent, Softbank [sic], and China Gold. The current round of financing is 1 billion US dollars, and the pre-investment valuation is 14 billion.”

After the story originally broke, there were no official confirmations or denials by either SoftBank or Tencent of their participation in an investment deal with Bitmain.

QQ’s report was picked up by mainstream media sources like Business Insider, which reported on August 14 that Bitmain had closed a “$1 billion funding round led by Chinese tech giant Tencent and Japan’s SoftBank,” linking their source as crypto media site CCN. Yahoo! Finance also reposted the story on Bitmain’s valuation from CCN, also linking to coverage of the matter from crypto news source CoinDesk.

As the media began reporting SoftBank and Tencent allegedly participated in a deal with Bitmain, bringing the company’s reported valuation to $15 billion, Blockstream CSO Samson Mow tweeted August 11 an image — reportedly from the Bitmain pre-IPO investor deck — showing the company allegedly had a large amount of Bitcoin Cash (BCH).

On August 12, Samson Mow also tweeted two images of Bitmain’s Q1 results, one in Chinese and one from Morgan Stanley, commenting:

“Why is Bitmain raising capital so fast & only showing Q1 results to pre-IPO investors? We’re well into Q3 now. The reason is Q2 was a disaster. Bitmain is sitting on a massive $1.24 billion USD in inventory & S9 prices dropped by ~85%! Q2 losses range in the $600-700 millions.”

In response to Mow’s tweets, Crypto Herpes Cat published a follow up on Medium, explaining several theories as to how Bitmain ended up with so much BCH — other than by selling BTC for BCH, as Mow purported — and what they are doing with their ASIC miners in a bear market, writing:

“How do you realize the value of this monolith crypto business and your holdings? You IPO and pass the bag on in one huge lumped stock offering and hope investors don’t realize all of your current assets are very, very illiquid.”

As early as June, Bitmain CEO Jihan Wu had hinted at the firm’s plans to launch its IPO on the Hong Kong Stock Exchange. Chinese publication QQ — the same source that alleged both Tencent and SoftBank’s involvement in the recent financing deal — has recently suggested that the firm will be valued at $30 billion.

The seemingly refuted investments come after a year of reports that appeared to indicate Bitmain’s astonishing profitability.

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Public Chain ASCH Receives $7.5 Million USD Investment from Bitmain

This is a paid-for submitted press release. CCN does not endorse, nor is responsible for any material included below and isn’t responsible for any damages or losses connected with any products or services mentioned in the press release. CCN urges readers to conduct their own research with due diligence into the company, product or service mentioned in the press release.

Hong Kong: August 1st, 2018

During the Bitcoin Cash Anniversary Global Summit on August 1st, Hantao Qian, CTO of public chain company ASCH, announced that recently ASCH has received 50 million RMB ($7.5 million USD) investment from Bitmain, the world’s biggest crypto company. ASCH accomplished cross-chain operation for BTC and BCH two months ago, which means both BTC and BCH can be used on ASCH’s mainnet.

Everything Is Now in Place

Bitmain founder Jihan Wu said of the investment deal:

“I have always admired ASCH’s solid technology and geek culture. Soon after ASCH’s accomplishment of cross-chain technology, Bitmain decided to invest in ASCH. We will soon start cooperations in aspects of R&D, community building and overseas marketing. Our collaboration will greatly expand the usage of BCH and accelerate its growth”.

There are at least a dozen active projects on ASCH’s platform, which include BlockDino, a digital dinosaur pet game, Koumei Cottage, a prediction market place, and Dream World, a VR game developed based on real world geography.

ASCH also strives to “reform” traditional industries with blockchain technology. It recently made its first step with Fangjinsuo, a loan consulting service provider which can potentially bring 3 million loan agents in China. Fangjinsuo has completed its DApp development on ASCH and begun private beta testing.

ASCH’s Two-Year Effort

ASCH’s founder Qingfeng Shan said of Bitmain’s investment:

“I really appreciate the investment from Bitmain, the world renowned enterprise with a strong blockchain ecosystem. The investment is a recognition of ASCH team’s efforts of past two years, and the cooperation will definitely boost our strengths in R&D and marketing. We will strengthen our cooperation in all aspects, and look forward to a bright future together.”

About ASCH

ASCH, founded in 2016, is a public chain platform based on cross-chain technology and multi-chain architecture.

Its mainnet has been running smoothly and safely for two years, with the token XAS listed on exchanges including OKEx, Kucoin, and Bit-z.

ASCH is a technology-driven project excelling in security, efficiency, flexibility, and cost. By providing an easy-to-use SDK and API and providing interoperability, ASCH is committed to lowering the barrier for developing a DApp (decentralized app) and building a solid foundation for the blockchain ecosystem.

About Bitmain

Bitmain, both the biggest bitcoin mining equipment manufacturer and Bitcoin mining pool around the globe, recently managed to close a Series B funding round and has a current $12 billion USD valuation. It is the largest blockchain company in the history of Bitcoin and cryptocurrency, with its equipment powering over 38 percent of the Bitcoin blockchain’s hashpower.

For more information about ASCH, please visit its homepage and online communities below:

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Bitmain to Open New Data Center in Texas as North American Expansion Continues

Bitmain, the world’s largest bitcoin mining firm, is preparing to open a new data center in Texas, external job postings show.

The China-based cryptocurrency company, which reportedly recorded $1.1 billion in profit during the first quarter, is currently looking for a project manager and data center site manager to staff a new plant in Rockdale, TX, a small town nestled an hour-and-a-half south of Waco.

The news was first reported by local media outlet KXAN, who said that residents are hopeful that the new bitcoin mining operation will bring hope to a region devastated by job cuts in the coal production and manufacturing industries.

In 2014, Aluminum manufacturer Alcoa shut down production at its Rockdale smelting plant, which had opened in 1952 and processed as much as 1.67 million pounds of aluminum per day.

Earlier this year, Dallas-based utility company Luminant shut down its coal-fired power plant in Rockdale, cutting approximately 450 jobs at the plant and a nearby coal mine.

Consequently, residents say that they are optimistic that Bitmain’s new data center will bring high-paying skilled jobs to the community.

“These are technical jobs, these are well-paid jobs,” said Rebecca Vasquez, chair of the local Chamber of Commerce, adding that she hopes the business will bring new homeowners to the area and increase its tax base.

However, as one unnamed cryptocurrency investment fund manager noted in the report, cryptocurrency mining industry operations tend to be “capital-heavy and human-light,” so it’s not clear how many long-term jobs the new data center will bring to the area.

Bitmain is also hiring staff in Chandler, AZ, as well as two cities in Washington — Malaga and Wenatchee — as it strengthens its growing foothold in the North American market.

Earlier this month, Bitmain opened a 20,000 sq. foot office in the heart of Silicon Valley, a move concurrent with its desire to follow up its recent $400 million funding round with another $1 billion in financing ahead of its planned initial public offering (IPO) later this year.

The firm has also established a major data center in Quebec, which has a large surplus of electricity but has nevertheless had a complicated relationship with the cryptocurrency mining industry.

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Bitmain Made $1.1 Billion in Profit in Q1, Filing for IPO ‘Very Soon’: Report

After posting eye-popping returns in 2017, the recent bear market has some cryptocurrency firms battening down the hatches amid declining returns. Don’t count industry giant Bitmain among them.

Citing an email obtained from a source close to the China-based firm, Fortune reports that Bitmain — best known for manufacturing bitcoin mining equipment — raked in $1.1 billion in profit during the first quarter of 2018. Conservatively, the company expects to earn $2 to $3 billion in profit for the fiscal year.

Remarkably, those figures place Bitmain nearly on par with chipmaking giant Nvidia, who reported a net income of $1.2 billion during the first quarter and has a ~$150 billion market cap.

It also marks a significant increase since last year when Bitmain said that it brought in $1.2 billion in profit and $2.5 billion in revenue — much less than the $3 to $4 billion originally estimated by analysts.

The email also confirmed that Bitmain is in the final stages of preparing to hold an initial public offering (IPO) on the Hong Kong Stock Exchange (HKEX). While the date of this listing has not yet been announced, the firm said that it will go public “very soon.”

As CCN reported, Bitmain is holding another round of financing before the IPO despite having just closed a $400 million round earlier this year. The firm is said to be seeking to raise as much as $1 billion at a $14 billion valuation, a ~16.5 percent increase from its previous funding round.

The firm has been using this new capital to finance a massive expansion, both of its business interests and its physical operations. In addition to purchasing major stakes in EOS creator Block.one, cryptocurrency trading firm Circle, and web browser Opera, Bitmain has placed a heavy emphasis on carving out a significant share of China’s booming artificial intelligence (AI) market.

Bitmain has further been expanding geographically, opening new mining centers in Quebec and the U.S. The company also moved into a 20,000 sq. foot office space in Silicon Valley while concurrently tripling the size of its Israel-based development center.

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Bitmain Plans Overseas IPO, Earned $1 Billion in Net Profit in Q1, Sources Report

Jihan Wu, the co-CEO of crypto mining hardware giant Bitmain, is reportedly planning to conduct an overseas initial private offering (IPO), Fortune’s crypto-focused section The Ledger reports July 30.

Bloomberg had reported in June that Wu was “open” to holding an IPO in a market with U.S. dollar denominated shares — like Hong Kong — as it would allow early backers to cash in funds.

Fortune writes today that their daily newsletter “Term Sheet” acquired an email from an unnamed source close to Bitmain detailing the firm’s recent financials before the IPO, which will be filed for “very soon” in such an overseas market.

According to figures mentioned in the email, Bitmain earned around $1 billion in net profit in the first quarter of 2018, with an estimated $2 to $3 billion in profit for the year.

The email notes that Bitmain plans to raise more funds for a total valuation of around $14 billion, a figure almost 17 percent higher than the $12 billion figure reported after a Series B June funding round. Bitmain also saw $1.2 billion in net profit and about a 50 percent net margin in 2017, according to an audit by “Big Four” firm KPMG cited by the email.

Bitmain raised between $300 and $400 million from Sequoia Capital subsidiary Sequoia China, U.S. hedge fund Coatue, and Singapore-based governmental investment fund EDBI during its funding round in June. The firm had previously received $50 million in a Series A funding round from Sequoia Capital and IDG Capital in September 2017.

At the end of June, Bitmain disclosed both its mining and mining hardware shipping practices with the intention to show the firm’s commitment to supporting a “fair and transparent cryptocurrency ecosystem.”

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Bitmain Discloses Shipping and Mining Policies for a ‘Fair and Transparent Ecosystem’

Chinese mining hardware giant Bitmain, one of the leading Bitcoin (BTC) mining firms worldwide, announced its policies for mining practices, according to an official blogpost July 25.

The recent list of policies intend to show Bitmain’s commitment to providing a “fair and transparent cryptocurrency ecosystem” in terms of policies for mining hardware shipping as well as those of mining practices.

Regarding shipping, Bitmain proposed four major measures including order quantity restriction, establishment of a “first-paid-first-ship” order of fulfillment, combatting “hoarding” practices, as well as publishing monthly reports on shipping updates.

Every 30 days, the company will disclose data advising the community on which algorithms Bitmain is mining for itself as well as the total hashrate of Bitmain hardware on those algorithms. The ASIC manufacturer will also provide regular shipping and volume information of new miners on the official Antminer Twitter account.

Bitmain reiterated its zero tolerance policy on “secret mining” practices. Secret mining is a process wherein ASIC manufacturers mine with new hardware before making that equipment available to the public. The company claimed that it has been always taken a negative stance towards the practice, emphasizing its “long-held zero-tolerance policy” on the matter. The company also clarified that it will not try to mine empty blocks:

“While often described as the result of sinister intent, empty blocks often occur because of issues in block propagation at the protocol level rather than active decision-making by mining pool operators.  We are actively working towards mitigating these issues.”

In August 2017, Antpool mining operator, managed by Bitmain, allegedly caused transaction delays and a surge of transaction fees by mining empty blocks.

Earlier this month, Chinese sources reported that Bitmain is now valued at $12 billion after a Series B funding round. Bitmain ostensibly raised between $300 million to $400 million from Sequoia Capital subsidiary Sequoia China, U.S. hedge fund Coatue, and Singapore-based governmental investment fund EDBI.

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Bitcoin Mining Giant Bitmain Eyes $1 Billion Pre-IPO Financing: Report

Already the world’s most valuable cryptocurrency company, Chinese bitcoin mining hardware manufacturer Bitmain is reportedly enticing investors toward a new $1 billion financing round ahead of its anticipated public listing in Hong Kong.

According to regional news resource Toutiao, Bitmain is looking at a new round of financing – its biggest yet – near the end of July that would see firm valued just a peg below semiconductor giant AMD, with a current market cap of $15.5 billion.

Notably, the funding round is valuing Bitmain at $14 billion pre-investment, a 16.5% increase from the company’s $12 billion valuation just last month after it closed a $400 million financing round. Altogether, Bitmain could be valued at $15 billion before the end of July if it completes its reported nine-figure funding round in the coming days.

Founded in 2013, Bitmain has become the dominant developer and manufacturer of application-specific integrated circuit (ASIC) chips that are commonly used to mine cryptocurrencies like bitcoin. According to the report, Bitmain sold $2.3 billion in ASIC chips, second only to Huawei as China’s leading IC developer in 2017. Bitmain also notched $2.5 billion in revenue with $1.25 billion in net profits last year.

Bitmain could be valued at $15 billion following its latest financing round.  Pictured: Bitmain’s Antminer ASIC chips. Source: Bitmain

Earlier this year, Bitmain CEO Jihan Wu revealed the company would strategize a marked foray into designing ASIC chips for applications in artificial intelligence (AI) technology. With an established product line under its AI chip brand ‘Sophon’, Wu estimates that Bitmain’s AI division could be responsible for up to 40 percent of the company’s revenues within five years.

Not content with raising finances, Bitmain has also been diversifying with a number of notable investments of its own. In May this year, Bitmain led a $3 billion financing round of Goldman Sachs-backed cryptocurrency exchange Circle, which announced plans to launch its own stable cryptocurrency pegged to the US dollar. The firm also gained a controlling stake in popular web browser Opera with a $50 million investment—— earlier this month. Opera has since launched an updated version of its browser – currently in beta – with a built-in Ethereum wallet that also supports ethereum-based tokens.

In a targeted expansion, Bitmain is also carving an entry into the traditional technology industry by rubbing shoulders among Silicon Valley’s elite with a new 20,000 square foot office in San Jose, California. The company is also expanding its research and development center in Israel, tripling its employee ranks in the country.

All of which sees a heightened and robust interest among venture capital giants and investors queuing up to get a piece of Bitmain before its anticipated initial public offering (IPO) in Hong Kong’s primary stock exchange later this year. Bitmain is expected to share its prospectus to the Hong Kong Stock Exchange and make a formal submission of its IPO in August ahead of its listing before the turn of the year. If successful, Bitmain could go public with a market cap of up to $40 billion, according to local Chinese media.

Featured image from Shutterstock.

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China Round-Up: Bitmain, Canaan and Ebang Receive ‘Unicorn’ Valuations, Number of DLT Companies Explodes


In recent cryptocurrency news from China, three cryptocurrency mining hardware manufacturers have been valued at more than $1 billion USD, Bitmain has supported the launch of a research center for digital financial assets at Tsinghua University, and more than 3,000 companies were found to have registered blockchain-themed business names during the first half of 2018.

Also Read:Powerful Cryptocurrency Firms on the Road Towards Becoming Banks

Bitmain, Canaan Creative, and Ebang Ranked as Chinese ‘Unicorns’

China Round-Up: Bitmain, Canaan and Ebang Recieve ‘Unicorn’ Valuations, Number of Chinese DLT Companies ExplodesShanghai-based Hurun Research Institute has published its Q2 Unicorn Index for the Greater China region, which features cryptocurrencies companies for the first time.

Bitmain is ranked 13th on the list, with Hurun valuing the company to be worth 70 billion yuan ($10.3 billion USD approximately). Canaan Creative also holds a significant position on the list, sitting at 32nd (tied with 20 other companies) with a valuation of roughly 20.34 billion yuan (approximately $3 billion USD). Ebang ranks 53rd alongside 38 other companies with an approximated valuation of 10.17 billion yuan (roughly $1.5 billion USD). All three companies recently indicated their desire to conduct initial public offerings on the Hong Kong Stock Exchange in the coming months.

Bitmain Backs Launch of Digital Asset Research Center at Tsinghua University

China Round-Up: Bitmain, Canaan and Ebang Recieve ‘Unicorn’ Valuations, Number of Chinese DLT Companies ExplodesThe Tsinghua School of Economics and Management has launched a “digital asset research center”, with reports asserting that donations from Bitmain were instrumental in leading to the establishment of the center.

Bitmain has ties with a number of leading Chinese universities, including Tsinghua University. Bitmain has provided sponsorship to the Tsinghua supercomputing team since 2016.

Bitmain also recently revealed that it plans to expand its development center in Israel. The expansion is expected to more than triple the number of Bitmain employees currently located at the facility (15), with the company indicating that it expects to recruit more than 40 additional employees to work at the center.

Over 3,000 Chinese Businesses Register Blockchain-Related Names in First Half of 2018

China Round-Up: Bitmain, Canaan and Ebang Recieve ‘Unicorn’ Valuations, Number of Chinese DLT Companies ExplodesSouth China Morning Post has reported that the number of companies that have registered names including the word ‘blockchain’ between January and July 16th of this year has increased by 500% when compared with the entirety of 2017.

As of July 16th, 3,078 companies had registered names containing the term “qukualian” (the Chinese translation of ‘blockchain’) during 2018, bringing the total number of firms with distributed ledger technology-themed names in China to more than 4,000. By contrast, it is estimated that 817 U.S.-registered firms include the term ‘blockchain’ in their name, with 335 companies donning similar names in the U.K.

Earlier this year, it was reported that Shenzhen Stock Exchange and Shanghai Stock Exchange were moving to crack down on the practice of companies seeking to cash in on the hype surrounding cryptocurrencies and distributed ledger technology. In March, China Money Network reported that “More than 20 listed companies have been questioned by the Shenzhen and Shanghai exchanges about their suspicious speculation on blockchain.”

Do you feel that China will continue to bolster its blockchain industry whilst seeking to restrict access to cryptocurrencies? Join the discussion in the comments section below!

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