Bitmain co-founder ready to start a war to take back his power in the company
Co-founder of crypto mining giant Bitmain, Micree Zhan Ketuan, has set up court proceedings against the company shareholders in order to restore his voting control. Zhan wrote in a letter in November 2019 on his WeChat social media account that he will legally return to Bitmain and restore his control as soon as possible.
On Jan. 3, Zhan submitted a Cayman Islands court in order to discredit Bitmain’s shareholders’ decision to convert the mining company’s Class B shares to one vote per share, while previously each Class B share had come with ten votes, which the shareholders greatly reduced Zhan’s influence over the company. He wanted the court to invalidate a vote at an extraordinary general meeting in November, which curtailed his rights.
According to a 2018 IPO prospectus, Zhan reportedly owned nearly 4 million Class B shares, almost double that of Wu, who is the only other holder of the special stock.
The ‘civil war’ occurs when the company has struggled with smaller rivals such as U.S.-listed Canaan Inc. and MicroBT.
Zhan suddenly kicked out of the company by his ‘brothers’
The conflict between Zhan and Bitmain’s shareholders began in October 2019, when the company’s co-founder and billionaire, Jihan Wu, announced in an email that Zhan was not the founder of the company anymore. Mr. Wu wrote he had decided to dismiss all roles of Ketuan Zhan as the Bitmain’s co-founder, chairman, legal representative, and executive director.
Zhan reacted to the announcement angrily, claiming that he had been removed as a legal representative of the company without his agreement. He said he did not realize he experienced those scenes like in TV shows, where people get stabbed on their back by those partners they trusted and fought together like ‘brothers’. He considers Bitmain his child and will fight for her with legal weapons.
He concluded, “If someone wants a war, we will give them one.”
Meanwhile, Wu further warned Bitmain employees against interacting with Zhan. He banned every single Bitmain employee from taking any Zhan’s direction, or participating in meetings organized by him, based on the situation, he considers firing of those who violate.
The two co-founders had long worked together as co-CEOs but were replaced in March 2019 by Zhan’s pick, Wang Haichao, when the company had problems with layoffs and a cash crunch caused by Bitcoin’s price plunge.
Bitmain dealing with layoffs and asset freezing
Bitmain has plans to cut off its staff by another 50% due to the upcoming Bitcoin halving, which will cut the number of new coins awarded to miners by half. In 2018, Bitmain already had a massive layoff, which also impacted around 50 percent of its employees.
In 2019, a Chinese court froze approximately $676,000 assets belonging to Bitmain’s subsidiary, Shenzhen Century Cloud Core. The regulation follows an application applied by a manufacturer of electronic components, Dongguan Yongjiang Electronics. However, Shenzhen Century Cloud Core has the right to appeal the decision if they want.