Bitmain employees have been forced to choose which side to stay on, but now customers are also involved in the growing power struggle within the world's largest bitcoin miner company.
The company's business is already compromised
Chinese media BlockBeats reported that since its return in early June, the exiled co-founder Micree Zhan has blocked shipments of bitcoin miners from the Beijing-based Shenzhen branch of Bitmain.
According to the 2018 initial coin offering prospect, Beijing Bitmain owns a branch called Shenzhen Century Cloud Core Technology, which is responsible for the production and packaging of its bitcoin miners in a warehouse for delivery.
Despite his expulsion from the parent company in October, Zhan remains the director of the Shenzhen branch. Under these circumstances, the business prospects of the bitcoin mining giant are foggy.
Igor Runets, CEO of BitRiver, one of the largest mining co-location sites in Russia, said that many of its customers have switched to Bitmain MicroBT's main rival because it offered shorter lead times.
Matt D'Souza, co-founder and CEO of Blockware Solutions, a United States-based miner distributor that also owns mining industries, said his company learned about the shipping problem weeks ago, and for the time being has suspended orders from Bitmain.
In addition to auto-mining like Bitcoin ProThe company also offers hosting services for customers and has a regular demand for thousands of units of mining equipment, said D'Souza.
The game of seals
Last October, after being ousted by his rival co-founder Wu Jihan, Zhan regained the status of legal representative in China for Beijing Bitmain in early May. But his return to the Bitmain office in Beijing earlier this month has divided the company.
In China, a company's legal representative has broad powers to act on behalf of the company. A legal representative usually holds the company's official seal, a crucial element in applying a company's choices.
Now, Bitmain staff have said that customers who have made wire transfer payments to a Bitmain subsidiary called Chongqing Guiyuan, may also be blocked from shipping their orders.
Chongqing Guiyuan is a new entity registered in March, whose legal representative is Ge Yuesheng, CEO of the Bitmain Matrixport financial services spin-off, who has sided with Wu.
It is wholly owned by Bitmaintech Pte, based in Singapore and fully controlled by BitMain Technologies Holding. In a tangled game of new or canceled seals, of claims made on the company's social channels, it seems that Zhan also managed to block the activity of the Chongqing Guiyuan branch. At the moment, neither Zhan nor Wu have made statements to the media.
