Cryptocurrency giant Bitmain gives up on Hong Kong IPO amid lay-offs, leadership reshuffle

Bitmain Technologies, the world’s biggest producer of bitcoin mining rigs, has given up on its plan to go public in Hong Kong, after the company struggled through mass lay-offs and a leadership reshuffle amid a prolonged bear market in cryptocurrencies.

The Beijing-based company on Tuesday published a statement acknowledging that its IPO application – filed in Hong Kong on September 26 – had reached its six-month expiration date. “We will restart the listing application work at an appropriate time in the future,” the statement said.

There were high hopes for five-year-old Bitmain to raise billions of US dollars in what could have been the world’s largest crypto-related IPO. But things took a turn for the worse after bitcoin price plunged 70 per cent and nearly US$500 billion was wiped off in the total market value of cryptocurrencies over the past year.

One major reason Hong Kong regulators are unlikely to approve IPOs for any crypto-related business is due to a lack of regulatory framework in the industry, people familiar with the situation told the South China Morning Post previously. Chinese crypto miner makers Canaan Creative and Ebang International Holdings also applied to go public in the city. While Canaan let its application lapse in November, Ebang updated its filings in December days before it expires.

At its peak in 2017, Bitmain controlled an estimated 75 per cent of the market for crypto mining rigs – the specialised computers used by individuals or businesses to validate transactions and earn new coins. In the first half of 2018, Bitmain booked US$740 million in profit, up 795 per cent from a year earlier, according to its IPO prospectus. Its two co-founders, Wu Jihan and Micree Zhan Ketuan, were among the richest crypto entrepreneurs, with a combined net worth of 46 billion yuan (US$6.8 billion), according to an estimate from the annual Hurun Report last year.

In Tuesday’s statement, Bitmain announced that its two co-founders have stepped down from their roles as co-CEOs, replaced by Wang Haihao, a chip designer who had headed multiple departments at the company previously. The leadership swap was reported in January by the Post.