Rumours of widespread layoffs at Bitmain, the world’s largest manufacturer of cryptocurrency mining equipment and largest operator of crypto-mining pools, are now being followed by stories the company’s two famous founders -Micree Zhan and Jihan Wu- will be leaving their posts as Bitmain co-directors, Weixin reports:
“On December 28th, a person close to Bit China told Odaily Planet Daily that (Micree Zhan) and Wu Jihan will be retiring as CEOs of Bitco. The newly-(appointed) person…(is) surnamed Wang.”
In November, a story circulated that Wu had stepped down from the company’s board of directors. The same news reported that both Wu and Zhan had also downgraded their titles at the company, from “director” to “supervisor” and from “chairman” to “executive director” respectively.
Wu, a former Beijing finance professional, started Bitmain with Zhan, a chip designer, in 2013.
The two have gone on to create one of the fastest Bitcoin mining machines in the world, a machine that has dominated the crypto mining industry.
Certain data shows Bitmain has supplied nearly 80% of all the crypto mining machines now used in the world.
Zhan is reportedly a billionaire, but Wu is believed to have lost millions by backing a fork of Bitcoin he created with Roger Ver called “Bitcoin Cash.”
Bitcoin Cash tracked Bitcoin at around 10% of Bitcoin’s value for the first six months of its existence, and even peaked at 20% of Bitcoins value, but has since tanked in price much more than standard Bitcoin in the 2018 crypto bear market.
After briefly achieving an all-time high price of $4091 USD on December 20, 2017, the price of Bitcoin Cash now sits at around $163 USD (down 96%).
Bitmain has been accused of various forms of cheating for and of nearly monopolizing processing power on the Bitcoin network, which relies on “decentralization” for network security.
Miners across the globe have also suspected that the Chinese government has granted extraordinary assistance to Bitmain in order to assert control over global crypto goings on.
Bitmain submitted an IPO prospectus this fall to the Hong Kong Stock Exchange (HKSE).
But like submissions from fellow Chinese crypto mining powerhouses Ebang and Canaan, the Bitmain IPO application is proceeding slowly through the review process and may be in danger of lapsing.
The Canaan IPO application has already lapsed.
Sources say HKSE regulators may be reluctant to approve IPOs for crypto mining companies because the crypto-trading sector is plagued by rampant price manipulation, insider and wash trading, the destabilizing effects of which could conceivably be passed on to potential stock investors.
Despite having posted record profits of more than $1.1 billion last year, Bitmain made their IPO application using modest numbers from Q2 of this year, and Q3 and Q4 numbers have been progressively worse.
The company is also dogged by rumours stating it will be laying off up to 50% of its 3000 employees, many of whom were added in the last year.
Bitmain has also closed its Israeli research facilities and let go of 23 workers there and will presumably be rolling up plans to back blockchain public education in the region.
Multiple sources indicate that layoffs will probably affect Bitmain’s artificial intelligence (AI) arm, its mines and mining pools, its overseas teams, and the Bitcoin Cash “Copernicus” client team.
Bitmain has denied the layoff stories, but verification on Chinese social media seems to indicate that the rumours are coming from message boards created for company insiders.
Skeptical crypto-industry watchers like Bitcoin developer Jimmy Song have even posited that Wu and Zhan are seeking the Bitmain IPO as a buyout for a company that has peaked, especially given the fact that its the company’s reputation has steadily worsened in the west, competition from other manufacturers is surging, and much of the is industry seeking greener ways of mining on crypto networks.