Bitmain Faces Multiple Detrimental Hiccups As It Strives To Stay On Top
The world’s biggest crypto mining firm, Bitmain, announced on December 12 that it is expanding its services in South America. The mining firm aims to spread in the region by partnering with two crypto mining consulting firms. Official reports state that the Chinese mining mogul will spread its global exposure with Fastblock.
Fastblock will act as its primary distributor in Brazil. On the other hand, the Miami-based Bit5ive will distribute Antminers to more than 30 countries in Central America, Latin, and the Caribbean.
The New Distribution
Since its foundation in 2013, Bit5ive sells, hosts, and supports crypto mining hardware. The company will now distribute Bitmain’s products using the legal distributor license in South America as elaborated by Robert Collazo, the co-founder, and CEO.
On the other hand, Fastblock intends to provide its blockchain expertise from managing at least 20 mining plants. Fastblock has been offering mining consulting services since 2014 as stated by the CEO and co-founder Bernardo Schucman.
That expansion news came amidst new revelation that Bitmain’s market share by hashrate plunged. The company’s market share dropped from around 72% to 66% between June and early December 2019. This data originated from the study “The Bitcoin Mining Network” done by CoinShares, a London-based digital asset manager.
In the meantime, Bitmain’s estimations allege that the company’s market share accounted for up to 75% of the worldwide crypto hardware market by 2017. Although the Chinese giant firm’s dominance over the crypto mining market has slid since 2017, the general trend of China’s growth has continued.
Bitmain co-founder Wu Jihan resurfaced at the helm of the mining company at a recent meeting with clients. On December 10, Wu Jihan made a public appearance at a private event in Chengdu. During that event in the capital of southwestern China’s Sichuan province, he said that Bitmain co-founder Micree Zhan Ketuan had stepped aside from his leadership role at Bitmain.
Earlier, Zhan alleged that he was ousted as a legal representative of the mining company after Jihan sent an email claiming that he had left the company. The email read:
“Bitmain’s co-founder, chairman, legal representative and executive director Jihan Wu has decided to dismiss all roles of Ketuan Zhan, effective immediately.”
Zhan felt betrayed and disappointed and he felt like he had been stabbed in the back by the partners he trusted and brothers he fought together with. He commented:
“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. If someone wants a war, we will give them one.”
After gaining full control, Jihan introduced new sales initiatives to attract new clients. The new initiatives reportedly feature the promise to seek deposits as low as 20% for investors who purchase Bitcoin mining rigs in large quantities.
Court Freezes Assets
On December 13, the Shenzhen Bao’An District Court made a ruling to freeze up to $676,000 in assets of one Bitmain subsidiary. According to that court filing, the Chinese court ordered to freeze 4,718,710.68 Yuan that translates into $676,000 of Shenzhen Century Cloud Core. This ruling came after Dongguan Yongjiang Electronics, a manufacturer of electronic components, submitted an application on September 24.
Dongguan Yongjiang requested the court to freeze that amount to guarantee that it can claim it in an ongoing trade contract dispute if the court rules in its favor. But, Shenzhen Century Cloud Core has the right to appeal that decision per the filing.
Recently, Shenzhen Police seized Zuoxing Yang, the founder of MicroBT. They took him in to question him over claims of intellectual property infringement regarding Bitmain’s technology. Yang earlier worked at Bitmain as a processor design director. During his tenure, he developed the firm’s flagship Antminer S7 and S9 mining rigs.
Bitmain sued the company over the supposed infringement of a patent in 2017. Nonetheless, Yang’s legal team successfully appealed to have that patent revoked in 2018. In that context, Bitmain said in August 2019 that it had discovered a fraudulent use of its brand. The company cited the promotion of Mangocoin and the sale of a product dubbed “Bitmain Cloud Miner” to support its case.
The criminals purportedly operated as Bitmain and promoted the products on their site, application, and software.
As Bitmain strives to expand its business globally and retain its market dominance, it is faced with multiple internal and external challenges. Only time will tell how it will fair amidst these challenges.