Business 26 November 2018Erik Gibbs
Bitmain has a choice—pay up or else
Bitmain is in serious trouble. It may have been able to portray confidence, solvency and reputability, but the masks are finally starting to come off. In addition to having to answer for a number of financial irregularities ahead of its planned initial public offering (IPO), the cryptocurrency mining equipment manufacturer has already been targeted for allegedly stealing the design of a miner. Earlier this month, word got out that it is in major debt to the Taiwan Semiconductor Manufacturing Company (TSMC) and it looks like things are about to get ugly.
The truth always surfaces. It may not happen immediately, but it always will. Bitmain has been facing a number of issues since the beginning of 2018, while it maintained a smile on its face to the public the entire time. If a recent Twitter post is any indication, however, the company that once ruled the crypto mining space is literally on the verge of going bust.
According to a tweet by BTCKING555, “Breaking: Our insider says Jihan is furious at BCH-SV for costing him massive in hash war. With Illiquid BCH collapsing, Jihan is running out of cash and has to pay TSMC. TSMC CFO issued ultimatum, pay or we cut you off for good! Bitmain [may be] bankrupt by year end?”
It has been reported that the majority of the assets held by Bitmain are in equipment that sits in warehouses, unable to be sold. It reportedly ran up a tab of around $1 billion with TSMC— an astounding amount of debt for a company to carry if it’s the world’s leading manufacturer of anything. After TSMC went on the offensive, Bitmain reportedly paid back $700 million and is still on the hook for the remaining $300 million.
Bitcoin BCH has plummeted in price since the hard fork. It has been previously reported that a large portion of the money Bitmain’s co-founder, Jihan Wu, had available was in the form of BCH. Now, with a drop of over 75% in value, this means that his holdings are worth over 75% less than he would like.
Whether or not the company is able to pay off its debt or go bankrupt remains to be seen. However, one thing is certain—it is nowhere near as stable as it has tried to make everyone believe.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.
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