Bitmain's 'hard fork' to end in $600M settlement in favor of Micree Zhan
The year-long dispute between Bitmain co-founders appears to be at an end with a $600 million compensation on the table.
After months of wrestling for control of the company, Bitmain co-founders Jihan Wu and Micree Zhan have reportedly reached a settlement. According to Chinese crypto expert Colin Wu, and reported by multiple local publications, both parties have agreed to a $600 million compensation for Jihan Wu with Zhan taking control of the crypto miner maker operations.
As part of the settlement, Wu will exit the company taking the BTC.com mining pool as well as Bitmain’s overseas mining centers. Thus, Zhan will be left with the Antpool mining pool and Bitmain’s China-based mining farms.
The deal also sees Zhan left in charge of the artificial intelligence (AI) division and the mining rig hardware manufacturing enterprise. Zhan will temporarily mortgage his shares to raise the $600 million required to buy out Wu’s stake in the company.
Sequoia Capital will act as the middle regulator in the negotiations with the deal expected to be ratified at the upcoming shareholders meeting slated for Dec. 28. However, reports indicate that the current terms of the agreement could change in the interim.
While the move represents a settlement of the current dispute, the splitting of Bitmain’s assets does pit both co-founders as competitors going forward. As part of the agreement, Zhan will reportedly complete an initial public offering in the U.S. before the end of 2022.
The company’s first IPO attempt elapsed back in March 2019 and likely sparked off tensions between both co-founders. Both figureheads stepped down from running the company but Wu returned in October and ousted Zhan in a shock move.
A month later, Zhan declared his removal from the company as illegal and threatened legal action. Zhan later regained control of Bitmain’s office in Beijing, storming the building with security personnel in early June 2020
U.S. Treasury Secretary Steven Mnuchin recently dropped a proposal requiring exchanges and crypto platforms to verify the identity of customers exporting digital assets to self-hosted wallets. Crypto exchange OKCoin noted the proposal would create additional work for exchanges.
“Upon preliminary review of the FinCen [Financial Crimes Enforcement Network] proposal as well as the wallet verification requirements, I think the proposal of extending the CTR requirement to crypto exchanges and having to collect the physical address of the recipient would mean great operational and administrative burden for exchanges,” OKCoin’s chief compliance officer, Megan Monroe-Coleman, told Cointelegraph.
Rumors of potential new crypto wallet laws made the rounds in the crypto space for weeks before Mnuchin finally dropped the bomb on Dec. 18, prior to his expected exit from office. Just a proposal at this stage, the new regulation would require identifying information on parties sending crypto amounts exceeding $3,000 to an independent wallet. If moved between exchanges, the limit rises to $10,000.
After the unveiling on Friday, industry parties have a 15-day window to comment on the proposal. “FinCen has specifically cited 'national security' as the reason for the proposal and an extremely short timeline for comments,” Monroe-Coleman said, adding:
“Therefore, OKCoin's comments which we will submit to them will focus on the challenges that we foresee to our business and the industry as a whole. We would like to request that FinCen issue practical and clear guidelines as well as allowing a generous grace period to increase the likelihood of a successful implementation by the industry, in light of the reality that there is no clear solution or industry wide tools that can help us to comply."
The proposal, however, did not turn out to be as crippling as initially rumored. Prior to its release, a number of U.S. congressional members spoke out against potential details of the legislation, which included word of a whitelist of permissible addresses that did not end up in.
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