Chinese cryptocurrency mining giant Bitmain is not faring that well at the moment. This current environment of low crypto prices caused a sharp drop of interest for new mining equipment, and companies like Bitmain have felt that the most.
A Twitter post from a crypto mainstay Dovey Wan revealed there could be even more misery piling onto the company pretty soon. According to her, a LinkedIn post was discovered detailing that drastic layoffs are in store for the mining giant. Her full words were as follows:
“there’s post on Chinese LinkedIn (usually very high accuracy, posted by employees themselves) saying Bitmain will start a layoff the coming week … separate rumor said the plan is for more than 50% of its headcount ???!”
Considering the fact that Bitmain currently employs an estimate of 2000 people, the potential impact of this alleged layoff could be significant. These news come right after Bitmain shut down their Israel-based blockchain research and development center. Bitmaintech Israel’s closure was explained by Gadi Gilkberg, the center’s former head:
“The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.”
Bitmain is known as the biggest (and possibly only) backer of Bitcoin Cash, the fork of bitcoin that recently saw another split of its blockchain and community, giving birth to Bitcoin SV. If Jihan Wu is forced to make a decision between BCH and Bitmain, it is his fiduciary duty to side with his company which could mean death to BCH hashrate and the whole project in general.
Estimates vary on how much bitcoin cash Bitmain is holding now. However, data from the bitcoin cash “rich list” indicates that the figure is between 664,000 and 1.33 million.
Notably, Bitmain appears to be methodically liquidating its BTC holdings, even as it deepens its stake in bitcoin cash. Bitmain had about 22,000 bitcoins at the end of March, down from more than 71,500 in Dec. 2016. This does not necessarily mean that Bitmain is trading BTC directly for BCH, but it does suggest that it is selling bitcoin to cover the expenses associated with its acquisition of BCH through other means, such as mining and ASIC sales. Source
IPO application in limbo
Per a report from the South China Morning Post, the Hong Kong Exchanges and Clearing Limited (HKEX), might not give their blessings to Bitmain, as well as other DLT-based firms, to launch an IPO, arguing that the blockchain industry in the country is still “immature”, reports CCN.
According to public listing rules in Hong Kong, there would be a closed-door hearing meeting with the Listing Committee, which gives the final approval or rejection within six months of filing for an IPO. A listing can lapse if the applicant fails to hear from the Committee within the six months period.
Established by Micree Zhang and Jihan Wu back in 2013, the China-based Bitmain is said to be the biggest manufacturer of crypto-mining chips. According to the prospectus filed with HKEX, the manufacturer recorded over $2 billion in revenue and a profit of $1.22 billion during the crypto boom of 2017.
Earlier in the year, Bitmain was able to raise $400 million from a pre-IPO funding round that was led by Sequoia Capital as a part of the manufacturer’s objective to raise $1 billion before beginning efforts to secure its IPO. In September, the crypto mining manufacturer officially applied to go public in Hong Kong.