Leaked Documents Show Bitmain’s Jihan Wu Could Face Charges For Fraud and Embezzlement

The power struggle in one of the largest Bitcoin mining hardware manufacturers in the world is still ongoing but could reach a very nasty end soon, at least according to some leaked documents. Micree Zhan and Jihan Wu, the founders of Bitmain, have been embroiled in a bloody battle for control of the company since last fall, when Zhan was ousted from the company by Wu.

Despite heavy coverage, the details on why Zhan was ousted still remain unclear. He owns 36% of Bitmain and is the largest shareholder of the company, headquartered in the Cayman Islands, but has been removed from his position as co-CEO by Jihan Wu. Wu also threatened Bitmain employees with termination if any of them were to take orders or be in any kind of contact with Zhan, a move that Zhan tried to counter with several lawsuits.

The drama between the two seemed to have died down a bit after Zhan entered Bitmain’s headquarters earlier in June, but latest news coming from the company show that the peace wasn’t all that long-lived.

Namely, an announcement allegedly coming from Zhan began circulating in Chinese social media platforms, giving more background to the events that preceded Zhan’s latest Bitmain headquarters takeover.

Bitmain Cayman controls Bitmain HK, Hk controls Bitmain in Beijing,after illegal push Micree out,Jihan took over the control of Bitmain HK, and Beijing.And stole the business license and company stamp of bitmain Beijing to change company representatives to himself and Luyao(CFO) pic.twitter.com/f6K0ONKXRc

— Molly (@molllliy) June 22, 2020

According to the announcement, Jihan Wu could face serious legal consequences. Zhan said that as the biggest shareholder of Bitmain, he holds 59.6% of the voting rights within the company—a state of affairs that cannot be changed. Therefore, any decisions made within the company without Zhan’s consent are illegal. 

Zhan said that Wu denied him of his voting rights by saying that the rest of the shareholders of the company agreed to do so during a closed-off meeting. However, the shareholder meeting reportedly never happened and was a lie constructed by Wu in order to oust Zhan. 

After pushing him out of the company, Wu took control over Bitmain Beijing. The company’s Beijing subsidiary is controlled by Bitmain Hong Kong, which in turn is governed by Bitmain Caymans. After taking over the company’s Beijing offices, Wu then took control over Hong Kong as well, stealing the company’s business license and stamp which he then used to make Luyao Liu, Bitmain’s CFO, and himself, the only two legal representatives of the company.

Zhan then went on that Wu continued to work against him even when he took back control over the company’s Beijing offices. He alleges that Wu hired people to steal the business license for Bitmain, moved some of the company’s documents and inventory out of the offices, and intentionally spread rumors about his involvement with Bitmain. He accused Wu of embezzling the company’s funds and properties, putting his own financial interests before the benefit of the company, as well as threatening employees and spreading false information.

It is still unclear whether Zhan will follow through on his accusations and report Wu to the authorities. If he does, Wu could be looking at a tough legal battle that could, probably, end with jail time. 

We are yet to see how these events roll out, as neither Zhan nor Wu have publicly commented on the matter at press time. 

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