Rival co-founders at Bitmain have reached a deal to resume product deliveries at the divided company amid a months-long struggle for control that has plunged the mining rig maker into chaos.
A statement on Bitmain’s official Weibo account said that an interim agreement has been reached to continue product deliveries. It was deleted a few hours later, but sources tell TechNode that the deal remains in place.
In the blue corner: The co-founders of the world’s largest makers of bitcoin mining rigs are in a standoff over control of the company. For the last two months, they have been producing official statements accusing each other of illegal behavior and ordering employees not to listen to each other’s commands.
- Zhan Ketuan was ousted in October 2019 by co-founder Wu Jihan with support of the company’s board, but Beijing authorities re-appointed him as Bitmain’s legal representative in May.
- Since May, Zhan has controlled Bitmain’s Shenzhen factory. He halted product deliveries in early June.
- The formerly-ousted co-founder holds 30% of Bitmain shares, which give him almost 60% voting power.
And in the red corner: Wu Jihan led the coup against Zhan in October, declaring himself CEO. He retains control of Bitmain’s offshore sales and its procurement affiliate in Hong Kong.
- Wu cut off the supply of chips to Bitmain’s Beijing factory earlier in June. Bitmain buys chips for its mining rigs from Taiwanese chip giant TSMC.
- Wu Jihan also controls the Cayman Island holding company that owns all of Bitmain’s entities. Zhan has sued this company, asking courts to annul the decision that ousted him.
Today’s news: A statement posted on Bitmain’s official Weibo account yesterday suggested (in Chinese) that the factions have made progress in their negotiations. They reached a consensus to maintain production schedules, ensure financial and tax compliance, and calm employees, the statement said.
- The statement was deleted a few hours later for unknown reasons. TechNode has confirmed its validity through someone close to the rig maker.
- According to Chinese blockchain news site Blockchain Real the consensus came after Wu proposed to Zhan a solution.
- Wu will pay suppliers and Beijing employees through the Hong Kong subsidiary. For every sale, he will transfer the appropriate sum to Zhan. These funds will only be used for Bitmain’s day to day operations.
- The last part of Wu’s proposal met resistance from Zhan. If Zhan accepted, he would be forfeiting control of finances to Wu.
- Bitmain started to ship a batch of orders from Shenzhen worth RMB 12 million ($1.7 million), the Weibo post said.
- When asked why the post was deleted and whether Blockchain Real’s reporting is true, a spokesperson for Bitmain told TechNode: “Thank you for your attention, but it is not convenient for us to reply to your question. 🌹”
Plenty of question marks left: deliveries will continue as normal, but the negotiations are still ongoing. It is unclear who is in control of Bitmain’s finances.
- Zhan had previously stated that he would procure chips directly from TSMC. This is still on the cards.
- The lawsuit in the Cayman islands is pending. Without a resolution on this front, Bitmain’s doesn’t have a clear leader.