Former Bitmain CEO launches cryptocurrency financial services startup

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Wu Jihan, co-founder and former CEO of China’s Bitmain, the world’s largest crypto-mining rig producer, has launched a new cryptocurrency startup, hoping to piggyback on a surging Bitcoin price.

Why it matters: Matrixport, Wu’s latest venture, aims to challenge a slew of digital asset financial services providers like BitGo and Genesis Global Trading which have capitalized on the cryptocurrency’s recent price resurgence.

  • The venture is already home to around 100 employees, many of whom were let go from Bitmain as a result of last year’s bear market.
  • Matrixport will likely look to tap into Bitmain’s resources and expertise to better serve the needs of Chinese crypto-miners.

“We are closely tied to Bitmain by our origin… But because we operate in different businesses, we are partners rather than competitors.”

—Matrixport CEO Ge Yuesheng

Details: Based in Singapore, where the cryptocurrency regulatory environment is relatively relaxed compared with China, the platform purportedly offers digital asset services including over-the-counter trading, lending, and custody.

  • Wu had a falling out with Bitmain’s other co-founder Micree Zhan over differences in visions for the company’s AI chip operation. Both co-founders stepped down as co-CEOs earlier this year.
  • Matrixport’s founder and CEO Ge Yuesheng, like Wu, was also a founding member and shareholder at Bitmain. He oversaw the mining giant’s investment unit before embarking on the new venture.
  • Matrixport is said to have been incubated within Bitmain and will provide crypto financial services to the mining rig producer, which generates massive crypto assets as a miner.

Context: Bitmain, Matrixport’s to-be biggest client, has had a turbulent year. The company is reportedly close to its long-awaited US IPO filing, which was delayed for months amid a bearish market after it let a listing application in Hong Kong expire in March.

  • Last year, the company shuttered some overseas operations and reportedly slashed half of its workforce.
  • Chinese authorities rallied against cryptocurrency trading and exchange services in late 2017 and regulations have remained stringent. Earlier this year authorities proposed banning crypto-mining in the country meaning there could be more hurdles to come for the Beijing-based rig maker.