Just recently, Bitmain the Chinese mining giant closed a pre-IPO financing round which reached $1 billion on July 23 at a $15 billion valuation. While Bitmain is popular for producing ASICS, the company has begun producing hardware for the artificial intelligence industry and aims to use funds realized from the IPO to expand the company.
At first everything looked fine, it was reported that notable key investors Tencent Holdings, Ltd., Softbank Group, Temasek, China National Gold Group, Sequoia Capital China amongst others had invested in Bitmain’s pre-IPO.
But what started as a golden opportunity for Jihan & co is starting to get more and more painful each day. The news of the pre-IPO coincided with the revelation that Bitmain had sold most of their Bitcoin (BTC) for 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 has also hidden part of its sales only showing the good part from Q1, not revealing the slowdown in sales and prices in Q2, to hide the worsened results.
Then suddenly Tencent Holdings and SoftBank Group both disputed their involvement in the pre-IPO investment round. Both Tencent and Softbank have now confirmed to CoinDesk that they have no connection to the investment deal.
Now Temasek is also reconsidering its participation claiming the Chinese company misrepresented the list of pre-IPO backers.