In a development that has surprised many in the crypto community, Bitmain co-founder Jihan Wu has reportedly been stripped of executive authority and is no longer calling the shots at the company.
Bitmain’s Jihan Wu Demoted
Jihan Wu, the co-founder of Bitmain, the world’s largest cryptocurrency mining equipment manufacturer, has lost his executive position in the firm.
The development was reported on November 12 by Chinese blockchain media outlet Sanyan Blockchain. According to the article, Wu can no longer participate in corporate decisions.
It is reported that Tian Yangang, a lawyer for Bitmain has revealed that the decision is the result of a board reshuffle that has taken place at the firm. The management has been restructured, and Wu has been demoted from the position of a “director” to that of “supervisor”.
According to Tian, after being demoted to the position of supervisor, Wu would have no voting rights, and his power has been reduced. Also, he cannot participate in the business decision-making of the enterprise.
It is reported that Wu owns 20.25% stake in the firm. He, along with Micree Zhan, established Bitmain in 2013.
A Possible Reason for the Decision
Bitmain, which enjoyed exponential growth in its turnover from 2015-2017, has seen declining revenues since the second quarter of this year due to an increase in competition combined with the bearish cryptocurrency market since January this year.
It is also speculated that the company’s acquisition of a signification amount of Bitcoin Cash last year and the substantial drop in the cryptocurrency’s value this year has dented its profit margins. Bitmain was instrumental in the creation of Bitcoin Cash the previous year.
The company is supporting the Bitcoin Cash ABC camp ahead of the Bitcoin Cash hard fork scheduled for November 15.
Live Bitcoin News had previously reported that sanctions imposed by the Trump administration on goods being imported from China have also hit the firm hard.
The declining revenues and profits have possibly impacted the firm’s decision of going ahead with an IPO. Bitmain had earlier filed an IPO application on the Hong Kong stock exchange.
The existing bear market and the controversial relationship with Bitcoin Cash has naturally created challenges for Bitmain, and the demotion can be viewed as a disapproval for Wu’s decisions made over the past year. Whether the re-shuffle will help the company recover the lost ground, only time will tell.
What are your thoughts on Bitmain’s demotion of Jihan Wu? Let us know in the comments below.
Images courtesy of Shutterstock, New York Times/Sim Chi Yin