According to Twitter account @btcking555, he has some insider information that Beijing-based Bitcoin mining giant Bitmain is being investigated by the U.S. Department of Justice. While this bombshell is yet to be confirmed, the above-mentioned Twitter account has proven to be a reliable source of Bitmain-related leaks.
Breaking: Bitmain to cancel its USA IPO plans. Insider tells there is investigation by American DOJ on Bitmain selling huge amount of equipment to ponzi scheme BitClub with Bitmain’s Yoshi Goto playing key role! Some of those sales numbers were apparently fudged to accomodate— BTCKING555 (@btcking555) January 13, 2020
Bitmain and BitClub
The company allegedly appeared in hot water after selling mining equipment to BitClub Network, the infamous Ponzi scheme whose victims were defrauded of more than $722 mln.
BitClub, which presented itself as “the most lucrative” way of earning BTC, had been up and running since 2014 before its operators were charged with wire fraud in December. It would routinely manage to cajole new victims to offer payouts to older BitClub members.
“The defendants allegedly made hundreds of millions of dollars by continuing to recruit new investors over several years while spending victims' money lavishly,” the DOJ press release states.
According to Dovey Wan, a founding partner of Primitive Ventures, Bitmain’s subsidiary BTC.com was responsible for operating the BitClub mining pool until November.
No IPO in the US
The alleged insider claims that Bitmain is set to cancel its IPO plans since due to the ongoing DOJ crackdown. As reported by U.Today, the mining behemoth was initially supposed to go public on the Hong Kong stock exchange (HKex) but its application expired on March 26, 2019.
After this failed attempt, Bitmain started to prepare for another IPO in the US, planning to raise up to $500 mln (a world of difference compared to the $3 bln it eyed in Hong Kong).
Bitmain didn't immediately reply to U.Today’s request for comment.