Bitmain has had a really difficult time getting to the finish line for its initial public offering (IPO). After letting its previous attempt expire after a year of bad news, it looks like it will now be canceling its most recent attempt as a new scandal comes out of the wood works.
BTCKING555, a twitter account dedicated to leaking information regarding Bitmain, broke the story that the mining company is canceling its current IPO push thanks to a new investigation into a possible Ponzi scheme the company got involved with.
Breaking: Bitmain to cancel its USA IPO plans. Insider tells there is investigation by American DOJ on Bitmain selling huge amount of equipment to ponzi scheme BitClub with Bitmain’s Yoshi Goto playing key role! Some of those sales numbers were apparently fudged to accomodate
— BTCKING555 (@btcking555) January 13, 2020
The BitClub Network’s founders are currently facing charges from U.S. authorities for offering unregistered securities. Internal communications showed the company was intentionally targeting “dumb” investors, with one member fearful they’d be perceived as a Ponzi scheme.
The core of BitClub’s scam was to promise that their mining operation would provide guaranteed returns for investors. New reporting indicates that the alleged Ponzi Scheme’s mining operation was run by BTC.com, a subsidiary of Bitmain. This may be the link to Yoshi Goto that BTCKING555 is referring to.
This all adds up to terrible, but perhaps unsurprising news for Bitmain. The company has been pushing for this most recent IPO attempt since late October 2019, which it hoped to raise somewhere between $300-$500 million from. The company badly needs that money as it continued to make massive layoffs.
But to even come close to getting that money, Bitmain would have to prove that it’s not involved in any current crimes, and that it’s worth that valuation. With this link to BitClub and constant news of difficulties the company is experiencing, neither of those things look possible.
If this is indeed the end of Bitmain’s IPO push, it follows less than a year after their last failure. They last attempted to file for an IPO at the Hong Kong Stock Exchange (HKEX). That attempt failed, both because there appeared to be some serious issues with the filing, and nearly $1 billion in losses signaled that Bitmain may not be worth very much to investors at all, making an IPO pointless.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.
To receive the latest CoinGeek.com news, special discounts on CoinGeek Conferences and other inside information direct to your inbox, please sign up for our mailing list.