Internal Tension at China’s Bitcoin Mining Giant Bitmain Turns Into Physical Confrontation

(Source: Live Corn Watch)

An internal struggle at China’s Bitcoin mining company Bitmain has intensified as co-founders got into a physical confrontation over possession of the company’s registration license. 

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The chaos occurred Friday morning as Bitmain’s ousted founder Zhan Ketuan was robbed of a business license for the company involving around 60 men, including Chief Executive Liu Luyao at a government service center in Beijing. 

According to Caixin’s report on Friday, as officials from the service center attempted to hand over the updated license to Zhan and his two lawyers, Liu abruptly grabbed the license, saying, “The business license is company property, how can it fall into the hands of an individual?”

The tension then escalated into a physical confrontation between the two parties. Police arrived at the scene after the center reported the incident, taking both parties to the police station. 

The internal struggle of the leading maker of Bitcoin mining equipment started last October as another founder of Bitmain, Wu Jihan, ousted Zhan and declared himself the legal representative of the company. The executive board then took the dispute to the Beijing Haidian District Bureau of Justice, which overruled the appointment that Wu should recover Zhan as the legal representative. 

However, Bitmain blasted the Bureau of Justice’s decision in an announcement published on its official WeChat account on Friday. 

“The decision to reverse the registration was a ‘mistake’ by the government agency that has seriously violated the ‘corporate law’,” Bitmain said. “We have already terminated the labor contract with Zhan on October 28, 2019. We will not acknowledge any action taken by Zhan as a legal representative and reserve the right to file legal claims against Zhan and related parties.”

Bitmain also claimed that Liu Luyao is the current legal representative of the company, who was representing Wu at the scene on Friday. Liu was appointed as the legal representative by Wu earlier this year. The appointment was overruled again by the Bureau of Justice after Zhan appealed the decision in January.

Since Zhan and Wu co-founded Bitmain in 2013, there has been long-held disagreements between the two founders on the development of the company under the uncertainty of the cryptocurrency market, especially after China started a crackdown on the industry in 2017. After failing to go public on the Hong Kong Stock Exchange in 2018, the Bitcoin mining giant is said to have confidentially filed for a U.S. IPO in October 2019.