Bitmain finally stopped, Wu Jihan turned around and left with love

Everyone is happy. Last night, Bitcoin Mainland co-founder Jihan Wu announced a settlement with co-founder Zhan Ketuan in a unique way via encrypted letters.

At this point, the two-year infighting among this leading cryptocurrency miner has finally come to an end.

As spectators, we finally don’t have to squat in the melon field anymore, and we don’t have to be shocked by their fighting methods. It’s great.

As miners, they no longer have to worry about the unknown company entity, unknown boss, wrong bank account, and mining machine delivery on time. It’s great.

As Bitmain employees, they don’t have to be caught between the conflicting orders of the two bosses, and don’t have to worry about taking sides, signing transfers, or being suddenly laid off. They just need to focus on business, get high salaries, and wait for the IPO. That’s great.

As two bosses, they no longer have to worry about not being able to sleep or eat, not being able to get in after leaving the company, not having to worry about losing their authority when on a business trip, having a license and then having it fly away, being confused about the real and fake official seals and legal persons, fighting each other openly and secretly, and so on and so forth. It’s great.

As investors in Bitmain, they no longer have to worry about exiting while also worrying about such a large post-investment project (such as attending shareholder meetings held by both parties and mediating). That’s great…

In short, all this is great. I hope that this settlement is no longer a stopgap measure, but a complete cure for the chronic disease, allowing it to once again dominate the trillion-dollar crypto mining industry .

Is it a loss or a gain for Wu Jihan's peaceful exit?

Leaving is as dramatic as the "return of the king".

In October 2019, Wu Jihan returned with a "coup" by replacing the legal representative of Beijing Bitmain and dismissing Zhan Ketuan.

Because of his extensive experience in the crypto industry, he was the Chinese translator and early evangelist of the Bitcoin white paper. He later built a Bitcoin mining machine empire and supported the Bitcoin prince BCH to become independent. Therefore, Wu Jihan has a good relationship with people both inside and outside the company, and that "coup" was also hailed as the "return of the king."

However, the ensuing internal fighting and verbal attacks have greatly damaged the image of both sides.

This time, Wu Jihan chose an unusual way to leave as usual.

On January 26, Wu Jihan posted an encrypted letter on Twitter. After it was decrypted by Igor Igamberdiev, people learned the outcome of this dispute.

In the letter, Wu Jihan announced that the differences between him and Zhan Ketuan had been resolved in a "friendly" and "constructive" manner. The two parties agreed that Zhan Ketuan would buy nearly half of the shares of Bitmain held by Wu Jihan and a group of founding shareholders for $600 million. In return , he has resigned as CEO and chairman of Bitmain today.

In order to complete the share purchase, Zhan Ketuan obtained a loan of US$400 million from Bitmain and promised to raise another US$200 million from outside the group.

The resignation letter also mentioned that as of January 25, Bitmain had $327 million in fiat currency and a short-term liquidity gap of $92 million. Bitmain's financial condition is good and healthy, and the loan provided to Zhan Ketuan will not have any negative impact on the sustainability of Bitmain's operations.

According to the solution reached, BitDeer and its mining farms in the United States and Norway will be separated from Bitmain. Wu Jihan will serve as the chairman of BitDeer and Matt Kong will serve as the CEO of BitDeer. Antpool will soon be split into an independent company led by Zhan Ketuan.

Through the above-mentioned agreement, Wu Jihan said that Bitmain 's business model will be very intuitive and the road to IPO will be smoother. Under this agreement, in order to meet the valuation adjustment, the number of shares held by investors in rounds B and B+ has also doubled, and the possibility of their investment profit is more clear.

From now until Bitmain goes public, Bitmain's board of directors will consist of 5 people, Zhan Ketuan has the power to appoint 3 of them, and Wu Jihan has the power to appoint the other 2. For the benefit of Bitmain, he has sincerely invited two colleagues - Zhu Xiang and Liu Jianchun.

Zhu Xiang is one of the founding members of Bitmain. He led the design of the hardware of the S1 and S19 mining machines, which are the most important to Bitmain. Liu Jianchun has been the Chief Financial Officer and CFO of Bitmain for the past five years. These two board members will consider the overall interests of Bitmain rather than the interests of individual shareholders.

Finally, Wu Jihan also expressed his blessing to Zhan Ketuan, which reminded me of how they had cried together at the annual meeting in 2019. The two of them have known each other for many years and have gone through many hardships. When it comes to the moment of meeting and laughing away all grudges, their feelings are difficult for ordinary people to understand.

Zhan Ketuan and Wu Jihan at the annual meeting. The picture comes from the Internet.

Wu Jihan wrote at the end of the letter: " After the agreement was reached today, it undoubtedly means that Bitmain will open a new chapter. As a co-founder of Bitmain, I have enjoyed the 2,815-day journey and received selfless help and support from many customers, colleagues, friends and investors. At the same time, I also send my most sincere blessings to Zhan Ketuan and Bitmain led by him."

According to Wu Blockchain, Wu Jihan is suspected of using double signatures at the beginning and end of his farewell letter to pay tribute to the Bitcoin double sha256 algorithm:

“—–BEGIN PGP SIGNED MESSAGE—–Hash: SHA512”

" END PGP SIGNED MESSAGE "

I think, just like Musk engraved "Of Course I Still Love You" on the launch vehicle recovery boat, Wu Jihan is expressing his attachment and deep love for Bitcoin and the mining industry , as well as the company he has worked for for many years.

After all, did Wu Jihan make money or lose money?

According to Bitmain's prospectus (September 2018 ), Jihan Wu holds 36% of Bitmain's shares, making him the largest shareholder. The second largest shareholder is Jihan Wu, who holds 25.25% of the shares. According to Wu's Blockchain, there are four other shareholders, including Ge Yuesheng, standing in Jihan Wu's camp. Together with Jihan Wu, the five of them hold 40.59% of the shares.

This time, Wu Jihan and some shareholders sold half of their shares, and the proportion of the shares sold is likely to be in the range of 15%-20%. According to the Hurun ranking, Bitmain's current valuation is between 4 billion and 5 billion US dollars . It has been predicted before that if Jihan Wu wants to acquire shares, he will need to prepare at least 1 billion US dollars.

This time, Wu Jihan only took $600 million and part of the business, and did not cash out a large amount of cash from the company, leaving the company alone. It is conceivable that this letting go contains a lot of righteousness.

Briefly reviewing, this business war case is a unique one

"Has your official seal or business license been stolen today ?" These are the two most discussed corporate scandals in the business community in 2019.

The figure below is the complete context of Wu and Zhan’s fight for control of the company as sorted out by Odaily Planet Daily ( as of June 2020, when Zhan Ketuan returned to the company ).

After Zhan Ketuan returned, he began to control the company's Shenzhen production line, while Wu Jihan held the company's financial power, and the situation became deadlocked. The former had no money to place orders for the production of mining machines, while the latter was unable to supply mining machines after receiving the payment.

Afterwards, the two parties reached a settlement on resuming production, allowing Bitmain's production line to be maintained.

In the second half of the year, another battlefield for the two men’s fight was the Cayman judgment. Zhan Ketuan filed a lawsuit with the Cayman court, accusing Wu Jihan of illegal procedures for changing the legal person. So far, the Cayman court has not officially opened the trial. After this settlement, the two parties no longer have to go to court.

What will the spin-off agreement bring to Bitmain and the mining industry?

For Bitmain, it is a good thing for the company to go public and investors to exit. If the delay continues, the company may face huge compensation for the bet, and more importantly, lose the confidence of customers and employees, and then lose the market. This settlement took half a year to finally be finalized, and the huge implications can be imagined.

After this settlement, how will Zhan Ketuan manage the company?

I think that after this battle, Zhan Ketuan will make adjustments to the issues that Wu Jihan once accused him of, and protect the hard-earned fruits of victory.

What about Wu Jihan? In addition to BitDeer, it is very likely that Wu Jihan will get Bitmain's overseas mining farms and BTC.COM mining pool, as some insiders have revealed. There is also the crypto financial platform Matrixport, which was spun off in early 2019.

For the mining industry, Bitmain's reorganization and full commitment to production are undoubtedly good news.

It is understood that due to the continuous surge in currency prices, the orders for mining machines from mainstream mining machine manufacturers have been scheduled for August and September. The tight supply of upstream chips is a common problem faced by manufacturers, but after solving the problem of company split, Bitmain's trust in upstream chip manufacturers may also increase; the company can also concentrate its efforts on the research and development of the next generation and the next generation of cutting-edge chips.

For competitors, the awakening of Bitmain, a lion delayed by internal strife, may be a big challenge.

I hope that a year from now we can see that Bitmain, the mining machine giant that once rose at an astonishing speed, has truly returned.

Original article, author: Huang Xuejiao. For reprint/content cooperation/seeking coverage, please contact [email protected]; illegal reprinting will be subject to legal prosecution.