Bitmain’s IPO Hinges on Temasek’s Decision to Participate

Bitmain misrepresented the list of backers for the pre-IPO round of funding, despite the multiple denials of DST Global.

Bitmain’s pre-IPO round of financing may be at risk. Temasek is reconsidering its participation after the Chinese company misrepresented the list of pre-IPO backers. Bitmain set out to seek traditional funding through an initial public offering, creating controversy in the crypto community.

Now, news has surfaced through social media, suggesting the Bitmain pre-IPO financing round may either make it or break it within hours. A Twitter account, @btcking555, retweeted by @WhalePanda, has translated information from Chinese sources:

https://twitter.com/btcking555/status/1032214368203747330

Bitmain’s IPO round was seen as controversial, and a drive to ensure a form of solvency, especially during the bear market. The sources suggest Bitmain may still have secured funding of around $560 million. Bitmain will file with the Hong Kong Stock Exchange in September, with a listing on the exchange expected at the end of the year, or at the beginning of 2019. The IPO is expected to raise as much as $18 billion, making it the largest crypto-related stock float, and one of the biggest IPOs in general.

The news of the IPO coincided with the revelation that Bitmain held 1 million Bitcoin Cash (BCH), making some suggest the funding was needed to offset the expenses of buying up and supporting the market price of BCH.

Bitmain and BCH have been inexorably linked, with more evidence appearing of dedication in mining the blockchain, even at times of low profitability.

DST Global is a late-stage venture capital firm, seeking opportunities in the tech sector. However, its participation in the pre-IPO round of financing for Bitmain has been misrepresented, and the company itself denied the allegations. Earlier, SoftBank also denied participating in the financing round.

The suspicion is that the fake roster of investors was also supported by KPMG, which is Bitmain’s advisor for the financing round. The information of DST’s involvement was present in the prospectus for IPO buyers, with vague wording in the original Chinese text, according to experts.

Bitmain has also hidden a part of its sales, not revealing the slowdown in sales and prices in Q2, 2018, to hide the worsened results. The group, known as “Magical Crypto Friends”, has given much attention to the issue:

https://twitter.com/Excellion/status/1031463936887939072

One of the reasons is the falling price for Antminer S9, which no longer commands a price above $2,500. On the official Bitmain store, Antminer S9j series, with a 14.5 TH/s hashrate, retails at $499, this time in cash. At one point, in-demand Antminer ASIC machines were only sold for BCH and commanded a much higher price.

The scandal surrounding the Bitmain IPO leads to suggestions that the market leader in ASIC production may see rough times ahead, especially given that the worsened conditions on crypto markets have cut into a large source of revenue, namely the sale of mined coins.