What happened: Wu Jihan, former CEO of Chinese mining giant Bitmain, is planning to launch a new cryptocurrency custody and trading firm named Matrix. The billionaire Chinese entrepreneur’s new venture, which is said to have been incubated with Bitmain, is expected to go live before the end of July. Bitmain is a key partner of the new company that could turn it into the world’s biggest OTC desk and asset manager in the world, according to unnamed sources quoted in the article. Matrix will offer custody and lending services to Bitmain, which generates a massive amount of cryptocurrency assets as a miner, and in turn receive a liquid pool of cryptocurrency assets for its OTC offering.
Why it’s important: The new venture’s biggest client-to-be, Bitmain, filed to list in Hong Kong in September. However, its IPO was delayed for months amid a bearish market and the application expired in March. Months ago, the company shuttered a few of its overseas operations and reportedly slashed half of its workforce. Chinese authorities’ proposal to ban cryptocurrency mining in the country means there could be more hurdles to come for the Beijing-based mining rig company. Bitmain, which saw a $500 million loss in the third quarter in 2018, attempted to diversify its business by making a major foray into AI chips last year.