The year is not ending on a good note for Bitmain.
The Beijing-based bitcoin mining giant is possibly looking at the resignation of its CEOs Jihan Wu and Micree Zhan, according to Odaily, a Chinese media outlet. The company has not officially confirmed any of the media allegations yet. But sources inside the organization have revealed that both Wu and Zhan are in conflict with each other over Bitmain’s dismissive financial performance in previous quarters. They did tell 8BTC:
Thank you for your attention but we have no comment at this time, please refer to the prospectus.
As CCN.com reported earlier, Bitmain posted $400 million worth of quarterly losses at a time when it was in the process of expanding its mining and blockchain development operations across the globe. The company had also eyed a $12 billion IPO round to compensate for its lack of funds earlier this year, but Hong Kong regulators have reportedly turned it down citing lack of rules to govern cryptocurrency-related products.
Odaily reported that Zhan eagerly took the blame of Bitmain’s poor performance over the recent months. He accepted that his management skills didn’t help the company much. While the company did post $1.1 billion in profits under his leadership following the crypto pump in 2017, the revenue started wearing off during the 2018’s crypto dump. It eventually led Bitmain to a scenario where it found its mining equipment and services undersold, much like its competitors that also reported huge losses during the crypto crash this year.
Wu, on the other hand, supported Roger Ver’s Bitcoin Cash ABC during their notorious hash war with their forked cousin Bitcoin Cash SV. It is out that Wu, who was looking to adopt a smart contract protocol on the ABC blockchain, diverted massive amounts of their mining pools’ computing power to the ABC camp to help them mine blocks faster than the SV blockchain. The alliance cost Bitmain millions of dollars.
Bitmain in November had already confirmed that it was restructuring its board ahead of its IPO. The decision led to the departure of half of the board members with Wu retaining his chairmanship and Zhan remaining on the board as the CEO and manager of the company.
As the rumors about Wu and Zhan’s resignations gain momentum, it appears that Bitmain is already close to an implosion. The company allegedly fired more than 50% of its staff in order to be leaner. It also closed down a branch in Israel.
Samson Mow, CSO at Blockstream, also claimed that the layoff would lead to the firing of almost 80% of the Bitmain workforce. Crypto investor Kyle Samani went ahead by predicting that Bitmain would eventually run out of money and sell all its crypto holdings, warning Bitcoin Cash and Litecoin investors of the potential impact.
Both Wu and Zhan remains in Bitmain as stakeholders. An official with the surname Chang will likely replace them for the CEO’s position.
[Note: CCN.com has reached out Bitmain for comment. We will update this article if we receive a response from them.]
Featured image from Shutterstock. Jihan Wu photo from Medium.com.
Last modified: May 20, 2020 1:03 PM UTC