Bitmain Accused of Exit Scam Prior to Scheduled IPO
Bitmain, the crypto-hardware mining giant, is currently being drowned in allegations of a potential exit scam prior to the planned Initial Product Offering this month following several statements by critics that Bitmain is hoarding massive Bitcoin Cash reserves. Jihan Wu, the founder, has consistently vocalized and publicly advocated the fork in Bitcoin which essentially produced BCH.
Bitcoin Cash Despair
On the 11th of this month, Samson Mow, Blockstream's chief security officer, posted on Twitter revealing details regarding Bitmain’s action prior to the Initial Product Offering announcement. As per the CSO, he believes the companies could have essentially eradicated one billion USD from their balance if the BCH vulnerability was not divulged in time by the developers of Bitcoin.
Bitmain is facing allegations regarding a possible purchase of massive amounts of BCH after it forked from Bitcoin during the same month last year during the unprecedented controversy. Despite its incredible valuation under the circumstances, Bitmain was reported to have suffered a huge loss of $500M following the decline in BCH’s price. The post on Twitter also points to the fact that the company has wagered on the survival rate of BCH this year and sold off all its Bitcoin possessions to purchase more Bitcoin Cash. Sadly, however, this proved to be a bad move on the company’s side and critics are now stating that Bitmain’s planned Initial Product Offering is the worst equity investment to possibly pour any funds into.
Following a post earlier this year, Crypto Cat, the author behind the post stated that the company possesses illiquid BCH that cannot be currently sold off due to the infamously bear-dominated market and a virtually non-existent buyer market.
Diving deeper Crypto Cat's post, it takes a closer look into the wrongful decision by the company to spend its BTC reserves to buy more Bitcoin Cash as opposed to directly pouring funds in its underlying business plan. Additionally, the lack of a BCH over-the-counter trading desk, and Bitcoin’s current dominance rate of over 50 percent of the entire crypto-market, Bitmain may leave the BCH network susceptible to what is known as a fifty-one percent attack.
The post on Twitter also highlights that the company’s previously highly successful cryptocurrency mining business has been failing after difficulty in mining blocks on the chain, and the addition of decreased gains, have been unsuccessful in rendering a successful and beneficial profit RIO for the company valued at around $8B. Another user on Twitter has also shared his opinions on the matter, going under the handle of Vijay Boyapati.