Did Bitmain mislead investors?

26 Oct, 2018
by Will Heasman
Did Bitmain mislead investors?

According to Coindesk, Crypto mining hardware giant, Bitmain allegedly misled investors prior to a funding round in their Initial Public Offering (IPO).

Coindesk claims to be in possession of evidence which links Bitmain to false claims of investments from multiple institutions, in order to draw in further investor participation in their IPO.

The evidence in question is in the form of “pitch desks”, or presentations which falsely suggest a large amount of backing from two companies: Digital sky technologies Global (DST Global) and GIC Private Limited.

One version of the presentation was translated from Chinese by Coindesk during their investigation. The pitch desk relays that Bitmain "recently completed a $400 million Series B round of financing from Sequoia Capital, DST and GIC, with a pre-investment valuation of $12 billion". This was allegedly forwarded by a source close to the deal, who stated that Bitmain created the pitch desk without providing proof of investment.

Coindesk were tipped off by a representative of DST global who asserted that "DST Global did not invest in Bitmain" prompting for a deeper investigation. A DST managing director formally corroborated the representative's claims reaffirming that no such backing was provided to any funding round in the Bitmain IPO.

 If these allegations are proven true, Bitmain may find themselves in very hot water. Ironically and perhaps damningly, This isn’t the first time Bitmain has allegedly misled investors. Back in September, it was revealed after reviewing Bitmains IPO prospectus that they had accounted their profit margins at the cost price at the time of acquirement, rather than the current market price at that time.

Do you think Bitmain purposely mislead investors? Let us know down in the comment section!

Read more: What we know about Bitmain from their HKEX IPO submission

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