A coup at Bitmain, the Chinese company that claims to have three-quarters of the world market for machines that mint bitcoin, has seen one of its founders return from exile to oust the other.
Bitmain, which shelved its initial public offering in Hong Kong earlier this year after a collapse in the price of bitcoin, has seen its fortunes rise again as the cryptocurrency has rebounded.
On Monday, company filings showed that Wu Jihan, who had stepped back from his role at the company, had returned to oust Micree Ketuan Zhan as legal representative and executive director.
Mr Wu had disagreed with Mr Zhan over strategy, with Mr Zhan pushing the company to focus on AI chip development, which has yet to yield significant success.
“Wu is Bitmain’s visionary founder and one of the giants of China blockchain. We’ll have to see if it works out, but this is a Steve Jobs coming back to save Apple situation,” said Matthew Graham, chief executive of Sino Global Capital, which focuses on blockchain investments.
In a sign of possible acrimony, Mr Wu sent an email to employees threatening punishment if they continued to meet or communicate with Mr Zhan or carry out any of his instructions, according to Caixin, a local business news outlet. A Bitmain spokesperson declined to comment further.
Bitmain is the dominant manufacturer of bitcoin-mining computers, and its equipment was in high demand during the cryptocurrency’s boom years. As well as providing the equipment, the company has become a significant miner of bitcoin itself and a notable supporter of bitcoin Cash, an offshoot of bitcoin.
Mr Zhan and Mr Wu led the six-year-old company as co-chief executives until early this year, when both men shed their titles as hopes for an IPO that planned to raise as much as $3bn faded and questions were raised over the financial information provided to the market.
Mr Wu’s return comes as Chinese president Xi Jinping endorsed blockchain, the technology underpinning bitcoin and other cryptocurrencies, and called for further support of the sector.
The policy nod sent blockchain-related stocks and the price of bitcoin surging this week and prompted Communist party mouthpiece the People’s Daily to urge people to “remain rational”.
Also on Tuesday, Canaan — one of Bitmain’s main competitors — filed to raise up to $400m in a public listing in the US. It posted a loss of $48.2m on sales of $42.1m for the six months ended June 2019.
Bitmain recorded a $742.7m profit on $2.84bn in revenues for the six months ended June 2018, according to its prospectus.
With Mr Wu back at the top of the company, he could return it to focusing on bitcoin Cash, which he had advocated in the past. But the move could also put the company further at odds with Beijing’s blockchain push and a central bank issued digital currency that is in the works, analysts said.
Mr Wu “is an idealist and a true believer in decentralised cryptocurrency,” said Liu Miao, a Shanghai-based independent cryptocurrency analyst. “He believes that people in the future should use bitcoin and not to be traced, which is contrary to what the People’s Bank of China wants to do.”
