Bitmain subsidiary assets frozen over trade contract dispute

Getting your Trinity Audio player ready...

In a bit of drama reminiscent of a similar incident from 2018, a subsidiary of Chinese cryptocurrency equipment manufacturer Bitmain is apparently not willing to live up to its end of a deal. Dongguan Yongjiang Electronics is going after the company, Shenzhen Century Cloud Core, over a contract dispute and wants to make sure that, should it win, it will be able to receive compensation. A request submitted to the courts wanted to have certain Shenzhen funds frozen and a judge has now granted that request.

Dongguan filed a grievance against the Bitmain subsidiary this past September and is looking to be paid around $676,000. The dispute centers on claims of intellectual property rights and the belief by Dongguan that Shenzhen is building crypto mining equipment using proprietary information.

The court filing indicates that Dongguan submitted its claim to the court “to seize (or seize, freeze) the property of the respondent Shenzhen Century Cloud Core Technology Co., Ltd. worth RMB 47,187,106.68, and provide a policy guarantee letter from China Pacific Property Insurance Co., Ltd. Shenzhen Branch As a guarantee. After review, the court considered that the applicant’s application complied with the law and should be allowed” [in accordance with] “Articles 100 and 102 of the Civil Procedure Law of the People’s Republic of China.

Bitmain has had to deal with a lot of internal and external issues over the past two years. Previously expected to be at the top of the crypto mining industry, 2018 started a downhill slide that the company wasn’t able to stop. At one point, it was called out for not paying its bills to a chip supplier and has also been accused of conspiring to manipulate crypto prices. Several lawsuits over patent disputes have been seen, including one that argued that the company stole the idea for its most famous crypto mining rig, the Ant 7. 

More recently, there has been an ongoing battle for control over the company as its two founders, Jihan Wu and Micree Zhan try to claim possession. Wu has forced Zhan out of the picture, but the battle wages as Zhan seeks recourse through legal channels.