Bitmain’s legal troubles are mounting after the cryptomining giant suffered a second court case defeat in as many weeks with over $1 million of assets frozen.
Why it matters: China’s regulatory war against cryptocurrency has ramped up in recent times. Several high-profile players have been hit hard as the fight to survive intensifies.
- Bitmain, one of the largest manufacturers of bitcoin mining rigs, is not immune from the recently increased oversight from regulators. Worse still, the company has been undergoing turmoil with the October ousting of co-founder Micree Zhan Ketuan by Wu Jihan, co-founder and chairman of the board.
Details: A district court in Fujian has seized a stake in its chip subsidiary Fujian Zhanhua Intelligent Technology worth over half a million dollars, according to data from Chinese business intelligence platform Tianyancha. Just last week, Baoan district court in Shenzhen seized over RMB 4.7 million of Bitmain assets.
- It is unclear why the court has seized Bitmain’s stake in its subsidiary, but Chinese news reports suggest the ousted co-founder Zhan might have turned his back on the company. The freeze will last for three years until Dec. 16, 2021.
- On Dec. 13, a Chinese district court approved (in Chinese) a request to seize nearly RMB 4.7 million worth of Bitmain’s assets over a “contract dispute”. The request was filed by electronics vendor Yongjiang Electronics against Shenzhen-based Century Cloud Core, a unit responsible for making Bitmain’s rigs.
Context: After re-securing his leadership of Bitmain, Wu has been gearing up for increased competition in the space and revealed new sales initiatives to lure new clients.
- Bitmain is not the only player facing legal setbacks. The founder of Shenzhen-based miner MicroBT, Yang Zuoxing, was taken away by local police earlier this week and is under investigation for allegedly embezzling around $15,000.
- MicroBT has been gaining more market share in China and is a rival of Bitmain. In 2017, Bitmain filed a civil lawsuit against MicroBT, the case dragged on for a year but was eventually dismissed.