Business 13 February 2019

Jasmine Solana

Canaan Creative co-founder leaves crypto miner maker: report

Internal disagreements have reportedly sent Xiangfu Liu, one of the three founders of Bitmain’s crypto mining rival Canaan Creative, packing.

Information on China’s national search website showed that as of Jan. 30, Liu is no longer a board member of Canaan Creative. A source familiar with the matter also told CoinDesk that the 35-year-old executive has also “left his day-today management role at the manufacturer and his executive board member position at its holding company, Canaan Inc.”

Liu stepped down following “disagreements with the company’s overall strategy,” according to the news outlet. Liu co-founded Canaan Creative with Nangeng Zhang and Jiaxuan Li in 2013, had served as a board member and also oversaw the company’s international marketing and strategy. Currently, Liu remained a “substantial shareholder,” owning 17.6% of the Hangzhou-based crypto mining hardware manufacturer’s total shares.

In January, reports surfaced that the Chinese crypto mining firm was in talks to start selling shares in New York “as soon as the first half” of 2019. Canaan Creative initially filed a listing application for an initial public offering (IPO) with the Hong Kong Stock Exchange (SEHK) in May, but the application had already lapsed in November amid reports that the stock exchange and local regulators raised several concerns about the company’s business model and prospects.

To justify Canaan Creative’s sustainability, the management reportedly wanted the company to continue “as a pure-play manufacturer of chips for crypto mining and artificial intelligence.” Liu, however, allegedly wanted Canaan to follow in the footsteps of rival Bitmain and also start running a crypto mining pool.

According to the insider, the executive “believes hardware and software should not be separated entirely in the blockchain industry, meaning companies that make mining equipment should not cut themselves off from mining farms and pool businesses.”

It may not have come to Liu’s attention, but Bitmain has already scaled back its crypto operations—mostly overseas—as it shifted its focus on “things that are core to our mission and not things that are auxiliary.” This includes shutting down its facilities in Israel, Texas, Amsterdam, and even its Wormhole team. Bitmain also underwent an executive shakeup, with Bitmain CEOs Jihan Wu and Micree Zhan replaced by Haichao Wang, the firm’s product engineering director.

As of February, Bitmain controlled 26% of the total Bitcoin Core (BTC) hash power, a drop from the 42% it held a year ago. And the downward spiral, at least for Bitmain, has just begun.

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.

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