Bring out the popcorn.
Bitmain, the troubled Chinese company that also happens to be the world’s biggest maker of cryptocurrency mining rigs, has devolved into civil war.
The company’s Chief Technology Officer Zhan Ketuan, who also goes by Micree, last year was unceremoniously booted out of the company he had co-founded. Last month, he tried to legally reverse his ouster by obtaining the company’s operating license from a Beijing government office, but 60 men — including Bitmain’s other co-founder — showed up and and snatched the paperwork from him.
Yesterday, according to social media reports, Zhan hired a dozen security guards and physically seized back control of Bitmain’s office.
“Micree today led a team of private guards crashed (sic) Bitmain Beijing office … they broke in by brute force and tried to take back the control (after Jihan’s initial coup and series of outrageous behavior),” tweeted Dovey Wan, a founding partner of Primitive Ventures.
😂😂😂OH MAN the #BitMainDrama this video is verified by @BlockBeatsChina
— Dovey 以德服人 Wan 🪐🦖 (@DoveyWan) June 4, 2020
Micree today led a team of private guards crashed Bitmain Beijing office … they broke in by brute force and tried to take back the control (after Jihan’s initial coup and series of outrageous behavior) pic.twitter.com/wkpKJ8Nr8H
According to a post on his Weibo account, Zhan sent out a letter to employees and Bitmain shareholders, asking employees to return to work and assuring all that he is indeed again in charge of Bitmain’s office. He apologized for Bitmain’s recent problems and promised to steer the company towards another IPO. He also suggested that under his leadership, he could make the company worth $50 billion within five years.
But the company insists that Zhan has already been removed from his position as the legal representative of the Beijing subsidiary of Bitmain, and a team of lawyers are now going to take him to court, according to the company’s Weibo account. Under Chinese law, a company’s legal representative has broad, sweeping powers and complete signing authority for the company’s capital and assets. Often the title of legal representative is held by the company’s CEO.
Business as usual?
Although Bitmain is forecasted to comfortably maintain its market share in bitcoin mining equipment, according to a report from Tokeninsights, it is facing stiff competition from MicroBT, which manufacturers Whatsminer. According to F2Pool’s calculations, MicroBT’s Whatsminer M30S+ and M30S++ models are currently the second and third most profitable bitcoin miners respectively.
But given the drama within the company, would investors and future customers still give it a vote of confidence?
Apparently so. Per reports from Weibo, and confirmed by a news release, Riot Blockchain has purchased 1,000 next-generation Bitmain S19 Pro Antminers from the company for $2.3 million that would increase its hash rate by an estimated 467%.
Game of Thrones, the Bitmain edition
Bitmain’s troubles began in October 2019, when CEO Jihan Wu — the company’s other co-founder — kicked Zhan out.
“Any Bitmain staff shall no longer take any direction from Zhan, or participate in any meeting organized by Zhan,” Wu said, at the time. “Bitmain may, based on the situation, consider terminating employment contracts of those who violate this note.”
The war between the company’s founders grew out of a difference of opinion over Bitmain’s direction for the future. Zhan believes the company should pursue a strategy of also offering silicon specialized towards AI, while Wu wanted to stay the course and focus only on mining.
After Bitmain’s failed IPO, Wu initially left the company but returned to “right the ship” with support from shareholders, saying he would take legal action to regain control over the company.
“Bitmain is our child. I will fight for her till the end with legal weapons. I won’t allow those who want to plot against Bitmain to succeed,” Wu has been quoted as saying. “If someone wants a war, we will give them one.”
Local authorities agreed to give control of the company to Zhan, according to a statement from Bitmain on April 29. But when Zhan showed up on May 8 at the Haidian District Administrative Service Center to collect the company’s licensing documents, some 60 other people showed up to block him, including Bitmain’s Chief Executive Liu Luyao. According to Caixin, the fighting over the paperwork erupted into a physical brawl.
But while grown men at Bitmain are jousting over the corporate office, at least the company is willing to admit it has one. Which isn’t the case for all crypto companies in China.
This story originally appeared in Decrypt, a media company covering crypto and the decentralized web, and appears here with additional updates by Forkast.News.