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Bitmain Business Booming Despite Public Feud Between Co-Founders Jihan Wu and Micree Ketuan Zhan

Mining giant Bitmain continues to accelerate—signing a new $23 million Antminer S19 Pro Contract with Marathon Patent Group—despite the public feud between its co-founders Jihan Wu and Micree Ketuan Zhan dominating the news over the last year.

Global leader in cryptocurrency and Bitcoin mining equipment, Bitmain has continued to expand its business with an announcement today that it has signed a $23 million Antminer S19 Pro Contract with Marathon Patent Group.

Marathon Patent Group (Marathon) is a Nasdaq-listed cryptocurrency mining company based in Las Vegas Nevada, has entered a Long-Term Purchase Contract of $23 million to purchase 10,500 Antminer S19 Pro.

Bitmain’s Antminer S19 Pro is purportedly equipped with the most advanced chipset currently available and continues to dominate the preferences of major mining firms’ orders.

According to Irene Gao, Antminer Sales Director of NCSA Region, Bitmain, these new miners are set to “bring in a new era of Bitcoin mining” and demand for the Antminer S19 Pro is rising throughout the industry.

But how has Bitmain continued to develop, expand and remain profitable throughout a very bitter and public feud between its co-founders Jihan Wu and Micree Ketuan Zhan?

The Last Antminer Shipment Was Delayed

The feud is evidently starting to impact negatively on Bitmain’s operations. In July, some 10,000 Antminers, worth about $10 million, were reportedly “stolen” from a mining facility owned by the company in Inner Mongolia. Some reports say the equipment appeared to have been “illegally transferred”.

On Aug 6, it was reported that Bitmain had to delay shipments of its Antminer bitcoin mining machines by three months, due to the ongoing feud between co-founders, Jihan Wu and Micree Zhan Ketuan, as control of the company intensified.

Bitmain said in the announcement that the delay was a result of “external interference over the company’s management.” Jihan Wu’s faction is reportedly in control of the company’s Wechat account and released the message.

The Feud Recap

The feud between Bitmain’s co-founders began in October 2019, when Wu ousted Zhan in a surprise move. Through mass emails, Wu ordered staff to stop taking orders from then-CEO Zhan, threatening them with termination if they even attended one of Zhan’s meetings.

The news surprised the entire organization as Wu had stepped out of his Bitmain CEO role to focus on his own cryptocurrency startup—Matrixport.

Zhan also refused to take the ousting in his stride and pushed back with legal action—suing Bitmain’s parent company.

In March 2020, China’s Changle district court made a ruling that favored Zhan to freeze out 36% of Fujian Zhanhua’s shares owned by Bitmain. Fujian Zhanhua is entirely owned by Bitmain Technologies Holding, of whom Zhan is the shareholder with the largest stake of 36%.

But on 27th April 2020, Bitmain claimed in their latest statement that the case that Zhan had submitted has no proof that he (Zhan) owns such stake in the company, which makes the claim as baseless for a legal ruling.

Bitmain argued the court’s ruling as only a procedural, jurisdictional rule and a physical fight broke out at a government office in Beijing after local authorities tried to hand the company’s operating license to ousted co-founder Zhan.

When the pair founded Bitmain in 2013, Wu and Zhan rode a historic crypto boom that made them both into billionaires. But the two co-founders have not managed to see eye to eye on the company’s future. When Wu took over, he made of point of undoing a lot of Zhan’s initiatives that had yet to make a profit, including a push into AI chips.

Jihan Wu Regains Control Of China Bitcoin Miner Making Giant Bitmain

The ongoing power struggle for control of Bitcoin mining equipment giant Bitmain has taken an interesting turn as former CEO and co-founder Jihan Wu has regained legal representative status.

According to China’s business registration record of Bitmain, an update on Sept. 14 shows Jihan Wu as the legal representative and executive director of Bitmain’s operating entity—Beijing Bitmain Technology.

Rival co-founder Micree Zhan who was ambushed by Jihan Wu via email last October remains manager of the firm but has subsequently is no longer recognized as Bitmain’s legal representative in China and will no longer have broad powers to act on the mining giant’s behalf.

A further announcement was published by Wu on Sept.15 on the company’s WeChat account. Wu confirmed that he is now the legal representative and Executive Director of Bitmain, and that the company’s respect for Zhan in a management role remains unchanged.

The Feud Recap

The news surprised the entire organization as Wu had stepped out of his Bitmain CEO role to focus on his own cryptocurrency startup—Matrixport.

Zhan also refused to take the ousting in his stride and pushed back with legal action—suing Bitmain’s parent company.

Co-Founder Jihan Wu Resigns from Crypto Mining Giant Bitmain

Jihan Wu, Bitman’s co-founder, has officially announced that he is stepping down from the leading cryptocurrency mining Bitmain Technologies Limited as part of an effort to settle long internal power struggles with rival co-founder Micree Zhan.

In a coded letter written on January 26, Wu stated that the dispute between him and Zhan has been finally resolved in a constructive and amicable manner. The leadership power struggles within the company have finally come to an end as Zhan will regain greater control over the firm.

Part of the agreement is that Zhan will buy nearly half of the Bitmain shares owned by Wu and a group of the company’s founding shareholders for a value of $600 million. In return, Wu mentioned that he has resigned as the chairman and CEO of Bitmain, as of January 26.

Zhan bought almost half of Bitmain’s shares (for $600 million) owned by Bitsource, a group of shareholders, which include Wu. He completed the purchase with a $400 million loan obtained from Bitmain and raised $200 million through a fundraising effort outside the group.

Furthermore, the settlement is also in line with previous reports that Bitmain plans to spin off its cloud mining and mining pool businesses. After the settlement, Wu will lead Bitmain spin-off Bitdeer, a cloud mining firm in Norway and the US. He will serve as the company’s chairman while Matt Kong will be the CEO of the new firm.

Antpool, the world’s leading Bitcoin mining pool, will soon be spun off into an independent firm led by Zhan.

Wu wrote that through the arrangement mentioned above, Bitmain’s business model will be highly streamlined, which would make it much easier to go for an initial public offering. In the past, Bitmain made an unsuccessful attempt to go public.

Bitmain’s new Board will have five members. Zhan will appoint three members while Wu will appoint the two remaining seats. Wu appointed the company’s chief financial officer, Jianchun Liu, and Xiang Zhu, the top designer of the company’s miners, to the Board.

Leadership Struggles Affected Bitmain Operations

The internal power struggle between the founders Micree Zhan and Jihan Wu has been ongoing for many years, often played out on social media platforms or a judicial courtroom. The situation became worse over the previous several months, marked by accusations of corporate misconduct, theft, and physical intimation.

The struggle involved control over communication channels and corporate bank accounts. Both sides allege criminal activity and wrong conduct committed by the other. The dispute left Bitmain’s clients confused about which group should to deal with and make payments to, thus causing delays in the delivery of mining hardware. The drama further left service providers and suppliers wondering which group to work with and who will repay them for their services.

This has resulted in competitors looking to take advantage of the internal power struggles by attempting to sweep up clients formerly working with Bitmain.