Analysis

In a new twist in Bitmain’s ongoing power struggle, co-founder Jihan Wu has regained the legal representative status of the bitcoin miner maker giant.

China’s business registration record update on Sept. 14 shows Wu has again become the legal representative and executive director of Beijing Bitmain Technology, the operating entity of Bitmain.

Subsequently, Micree Zhan, the rival co-founder who was ousted last October by Wu but regained control earlier this year, is no longer the legal representative and executive director but remains a general manager of the firm.

The role of a company’s legal representative in China has broad powers to act on a firm’s behalf and usually also holds the company’s official seal, a crucial element for signing company decisions into effect.

In an announcement published Sept. 15 via the WeChat account of Bitmain’s AntMiner brand, Wu reaffirmed the status update and said the company’s respect for Zhan “remains unchanged.”

The update suggests Bitmain’s internal power fight may have come to a short-term end although the two sides’ lawsuit in the Cayman Islands – where Bitmain’s parent holding entity resides – is pending for a final judgment.

Wu added in the announcement that Bitmain’s management now aims to work out sustainable solutions to solve all kinds of problems caused for employees, investors and customers due to the co-founders’ war of words.

“Since 2020, the management’s feud has damaged Bitmain’s market shares and its brand image. We have lost customers and employees were forced to take sides,” Bitmain said in the post. “Various breaking events and negative news even thwarted our plan to go public. Our equity option promised to employees almost became a useless piece of paper.”

In an October coup last year, Wu removed Zhan’s role as Bitmain’s chairman, executive director and legal representative even though Zhan is the biggest shareholder of Bitmain. Wu alleged that Zhan’s leadership during 2019 caused serious issues – including a significant drop in Bitmain’s bitcoin miner market share. Zhan filed a lawsuit in the Cayman Islands in December over the legitimacy of Wu’s move.

The event has quickly escalated to a yearlong power struggle. Earlier this year, Zhan regained his status as a legal representative after winning the local government’s favor and forcing his way into Bitmain’s Beijing office.

Soon after that, Bitmain’s manufacturing business for bitcoin mining equipment was essentially hard-forked into two with each side trying to establish their own sales arms and factory supply chains.

As a result, Bitmain’s employees were forced to take sides and the stand-off caused significant shipment delays for Bitmain’s customers, many of whom had to turn to rival miner makers such as Shenzhen-based MicroBT.

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