Bitmain May be Sued by Investors Over Misrepresentation and Omission of Information

Bitmain May be Sued by Investors Over Misrepresentation and Omission of Information

In recent series of tweets posted by, what looks like a “crypto insider” by the name of BTCKING555, all doesn’t seem to be going well between the investors and the Leading Bitcoin Mining Company, Bitmain which has filed for the IPO.

Bitmain and investors in a tussle

According to the recent tweet, BTCKING555 brings out a possible heard on street(HOS) news which claims recent investors threatening to sue Bitmain for misrepresenting financial information & Material Omission. He also says that the warrantors to the agreement are Jihan Wu and Ketuan Zhan and liability of this misrepresentation would spread across group companies as well including Bitmain Technology, Blocktrail, Hashnest, Tospring (to name few).


About a week back it was BTCKING555, that broke the news of Bitmain financial condition. According to him. Bitmain’s financial status was depreciating rapidly within the crypto sector and in order to hide its faltering economic condition, Jihan Wu, the CEO of the organization, reportedly “rushed a deal earlier this July”. He then went on to add that the numbers associated with this deal were purposely inflated by the firm (as being $400 Mln) so as to hide Bitmain’s dwindling fortunes.


The deal under question here took place in July 2018, when Bitmain raised reportedly between $300 million to $400 million. Sequoia Capital subsidiary Sequoia China, U.S. hedge fund Coatue, and Singapore-based governmental investment fund EDBI. This round of funding valued Bitmain at USD 12 million.

In early June, the company’s CEO Jihan Wu said he is “open” to plans to conduct an initial public offering (IPO) in Hong Kong. Wu said that an IPO in the region would be a suitable means for allowing early investors to cash in their funds.

In May, one of Bitmain’s main competitors, China-based Canaan Creative, announced that it would start an IPO on the Hong Kong Stock Exchange in July. In an interview with Reuters in April, Canaan co-chairman Jianping Kong said, “We … prefer listing outside mainland China as we are in a global business.”

This was the second series of funding. Previously Bitmain in September 2017, had raised $50 million in a Series A funding round from Sequoia Capital and IDG Capital.

Founded in 2013, Bitmain Technologies is a privately held company that develops Bitcoin mining hardware and ASIC chips. The firm reportedly held 70-80 percent of the market for Bitcoin mining hardware in February 2018. Bitmain also operates one of the largest Bitcoin mining pools, Antpool. Earlier this year, the company was reported to be involved in the development of Ant Creek mining centers in the U.S.

Also, read: Bitcoin the Future? BTC so Trumps USD with Limited Supply, No Borders & No Central Control

Other Tweets of BTCKING555 reveal more agony for Bitmain

Many investors have been questioning why Bitmain is not releasing its Q2 figures— even though 60 days have elapsed since the start of Q3. These questions have been further compounded by the fact that Bitmain’s executive team has been rushing to raise a quick $1 bln for its Pre-IPO round before Wu ‘reportedly’ decides to disclose the company’s ‘catastrophic Q2 numbers’.

According to BTCKING555, realizing that financials and numbers collapsing, Jihan rushes for a $260 mln deal in June (not $400 mln as reported) primarily driven by Sequoia Capital. The deal was done with limited Due Diligence and using Q1 numbers. Neil Shen, the partner at Sequoia who was involved in the deal was also duped into believing all good.






Additionally, BTCKING555 also noted that a lot of investors are displeased with the fact that none of the big players that were allegedly investing in Britain’s IPO have yet to confirm these rumors. For example, earlier last month, Bitmain claimed that huge multinationals including Softbank, Tencent, DST, and GIC had signed agreements with the firm— but as things stand, none of these stories seem to be carrying any substance to them.

Also If insider sources are to be believed, the contracts drawn up by Bitmain have been devised as per existing laws in Hong Kong. As a result of this, many investors are already looking to bring lawsuits for material omission against some of the core parties involved in this case including Bitmain’s CEO, CFO, and KPMG.

Things, if believed, have gone drastically wrong for Bitmain and the first large crypto IPO seems to be in a lot of trouble while going to the IPO. Looks like pulling out of an IPO is the best for Bitmain. The crypto industry has been such that as the dust settles over one fraud or scam vanishes (Mt Gox) the other one rises tarnishing the image again. If lawsuits start coming up again Bitmain, it will be a disaster on the credibility of the crypto industry.

Will Bitmain be able to come clean from these allegations and have a successful IPO? Do let us know your views on the same.

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Bitmain May be Sued by Investors Over Misrepresentation and Omission of Information
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Bitmain May be Sued by Investors Over Misrepresentation and Omission of Information
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In recent series of tweets posted by, what looks like a “crypto insider” by the name of BTCKING555, all doesn’t seem to be going well between the investors and the Leading Bitcoin Mining Company, Bitmain which has filed for the IPO.
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Nilesh Maurya 669 Articles

Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Reach out to him at Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Reach out to him at [email protected]

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