Bitmain’s IPO was secretly planned after it got sponsorship from Deutsche Bank which is a German multinational company and now their entire plan can go up in smoke as we are reading further in the blockchain latest news today.
Bitmain as a leading bitcoin miner has been struggling to bounce back since the harsh crypto winter. There was even a very low demand for crypto mining machines which caused the profitability to plummet. The secret filing with the US Securities and Exchange Commission will help raise badly the much-needed capital. Bitmain is now looking to raise up to $300 million and $500 million with the fundraiser.
The company wanted to raise $3 billion in the beginning via the Hong Kong Stock Exchange but had a lot of issues with the regulators. Bitmain also hired Zheng Hua who is a former NASDAQ China representative, to be a project consultant to increase the chances of approval. The reports show that there was an escalation between the co-founders Jihan Wu and Micree Zhan and this is one of the reasons the company was caught up in the leadership tangles for years.
Zhar was ousted as an executive director at the company by Wu and the staff at the company also received a bellicose statement warning them against interacting with Zhar. The internal meetings show that the company had missed a lot of great opportunities due to the disagreements and according to Wu, the strong internal division caused the Bank of Beijing to take back on the credit offer which could have been a major boost to the company.
The crypto companies have struggled to gain IPO approval as with the Bitmain’s IPO from major jurisdictions such as the United States and China. China even blacklisted a few companies from filing IPOs and the regulators believe it is premature for crypto-centric companies to seek a license because there is no legal framework to provide them with guidance.
Getting approval seems like a major hurdle at the moment because of the level of trepidation that surrounds the industry. The digital currency prices are changing constantly and are highly susceptible to manipulation. The SEC approval of an IPO is highly unlikely at the moment.
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