Bitmain Records $1.1 Billion In Q1 2018 Profits, Plans To Launch IPO

  •  Chinese mining company Bitmain’s profits reportedly totaled $1.1 billion for Q1 2018.
  • Bitmain may be valued at $14 billion, up 16.6% from the previous report.
  • The firm plans to launch an IPO “very soon” in Hong Kong.

Bitmain Technologies, a company that manages the world’s largest cryptocurrency mining operation, recently disclosed its plans to hold an initial public offering (IPO) in Hong Kong. The Chinese mining giant may also reportedly consider conducting its IPO in another market that supports issuing USD-denominated shares.

At present, Bitmain has not provided an official launch date for its IPO, but inside sources state that the company “plans to file for an IPO very soon.”

Notably, the mining firm’s IPO could potentially give early-stage investors such as IDG Capital and Sequoia Capital an option to cash out their investments. This development is quite significant since inside sources have revealed that the crypto mining conglomerate is raising additional funds, after its $400 million investment round in June.Based on Bitmain’s current financial data, the latest funding round may increase the mining giant’s valuation to about $14 billion, which would equate to 10 to 11x greater earnings, according to an email shared by sources working closely with the company.

Bitmain May Earn $2-3 Billion In 2018 Profits

As Crypto Globe reported, Bitmain had recently been valued at $12 billion, however, these updated financial figures indicate a 16.6% increase in the firm’s valuation. Moreover, the email mentions that Bitmain’s operations were audited by KPMG, a leading multinational professional services company.

According to  the audit results, the crypto mining company has earned a profit of $1.1 billion during Q1 2018. The email also states that Bitmain’s total profits for the year 2018 could be at least around $2-3 billion.

Interestingly, Bitmain’s IPO plans have come at a time when the Bitminer Factory, a large crypto mining operation powered by renewable energy, revealed that its initial coin offering (ICO) has already raised $2 million, after being launched on July 21st.

Bitminer Factory’s official medium post further notes that its looking to expand its operations to Herzegovina, Bosnia. The company also stated it’s currently testing IBM’s Power9 processor, in addition to its artificial intelligence and machine learning technology.

These tests are a part of Bitmain Factory’s larger effort to develop a way to develop “a product that can optimize a server farm dedicated to cryptocurrency mining.”

Binance CEO Sues VC Firm Sequoia for Reputational Damages

Francisco Memoria

Changpeng Zhao, the CEO of leading cryptocurrency exchange binance, has reportedly sued well-reputed venture capital firm Sequoia over reputational damages allegedly caused by a lawsuit the VC firm filed against Binance that was dismissed.

According to a filing submitted to the High Court in Hong Kong that was obtained by CoinDesk, Changpeng Zhao, referred to as CZ, claims Sequoia Capital China, a unit of Sequoia, significantly damaged his reputation and is looking for compensation.

This, according to the CEO, prevented him from raising money at a proper valuation for Binance. Sequoia reportedly damaged his reputation through a lawsuit filed in April of last year over a funding deal that went awry.

A hearing for the case is set to take place on June 25 between CZ and SCC Venture VI, a special purpose vehicle of Sequoia Capital China. An inquiry to determine whether Zhao “sustained any and what damages” is being demanded, over an injunction order Sequoia obtained in late 2017 that reportedly prevented CZ from raising funds in March of 2018.

Sequoia’s initial lawsuit was dismissed by the Hong Kong High Court, with the VC firm having to repay Binance the legal fees required for its legal representative.

In the filing, the CEO of Binance stated:

The injunction order has caused loss to me for which I am entitled to reasonable compensation by Sequoia. In particular, I have suffered i) a loss of chance to raise capital through successive rounds of financing at increasing high valuations; and ii) damage to my reputation.

Sequoia is notably seen as one of the most well-reputed venture capital firms focusing on tech startups, and available data shows it operates 22 funds across the globe and raised $15.3 billion so far.

Meanwhile, Binance has been going through a rough few weeks. The exchange was hacked for 7,000 BTC earlier this month, and considered rolling back the Bitcoin blockchain to recover the stolen funds, a move that saw him be heavily criticized on social media.

Binance recently published an extensive blog post recapping the incident that detailed hackers managed to control a number of Binance user accounts and structured large withdrawals from these. More recently, various users complained they lost funds after experiencing lag on the trading platform.