The legal battle between Bitcoin mining giant Bitmain and its co-founder, Micree Zhan is beginning to take shape, and the latter appears to have scored first points.
Earlier this week, Bitmain revealed that the Beijing Haidian District Bureau of Justice had approved Zhan’s request for it to block the firm from registering a legal representation for its Beijing branch.
Bitmain’s Legal Representation
Bitmain had tried to get Luyao Liu, its Chief Financial Officer, to be the legal representation for its Beijing branch. Zhan had been the firm’s legal representative until he was removed from his position at the firm last October by his co-founder – and Bitmain’s currency CEO – Jihan Wu.
Wu went on to announce Liu as the firm’s new legal representative, explaining that the decision to promote the latter was due to a need for more effective internal management. Zhan went on to appeal the decision a month later, asking that the Justice Bureau should rescind Liu’s appointment and reappoint him to the post.
Reports have now confirmed that the Bureau accepted the request. However, while Liu’s appointment was annulled, Zhan wasn’t reinstated as well.
“We deeply regret the decision and think the bureau has violated corporate laws, and our company’s autonomy via administrative measures,” the company reportedly said, while explaining that it has the authority to appoint a new legal representative for the Beijing branch since it’s the holding company.
The legal representative battle is part of a larger conflict between Zhan and Bitmain, which all began with his firing. At the time when Bitmain hired Liu as its legal representative, Zhan explained in an article that he would be moving forward with his quest to get back control of the firm.
He eventually filed several suits against the firm and has been in a legal tussle since then. Bitmain escalated the fight earlier this week, releasing a statement in which it disputed Zhao’s claim of owning 36 percent of Fujian Zhanhua Intelligence Technology Co. Ltd – another company subsidiary.
While Zhao had sued Bitmain on the claims that he owned 36 percent of the subsidiary, Bitmain’s Tuesday statement challenged the legitimacy of that claim. Bitmain explained that Zhao had offered no proof to back his claim up – a fact which rendered his entire argument baseless before the law.
The Company’s Unusual Standing Going Forward
While the two sides continue to argue, Bitmain’s business has been in some murky waters. Earlier this week, Samson Mow, Chief Strategy Officer (CSO) of blockchain infrastructure firm Blockstream, explained via Twitter that the company’s new flagship products – the Antminer s17 and T17 – had experienced some significant technical issues.
As Mow’s tweet explained, customers have reported issues with the mining rigs’ power supply fans. The rigs’ heat sinks have also reportedly been falling off, thus causing them to short out.
However, the firm also appears to be getting back on its feet at the same time. Industry blog Wu Said Blockchain reported earlier this week that Bitmain has already made about $300 million this year alone. The source added that the firm has also gained more market share, as it propped up the hash rate on two of its mining firms and opened two new locations.