Bitmain’s Subsidiary Gets $676,000 in Assets Frozen by Chinese Court

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About $680,000 in assets owned by Bitmain’s subsidiary is now frozen, according to the latest ruling issued by the district court of Shenzhen on Dec. 13. The decision benefited another company named Dongguan Yongjiang Electronics, which was given a proprietary protection request in an agreement dispute with Shenzhen Century Cloud Core, a subsidiary of Bitmain.

Century Cloud Core is Bitmain’s largest branch and is responsible for the manufacture of mining products, packaging, and quality assurance. Yongjiang, on the other hand, is a supplier of electronic devices, which requested the court to freeze 4.7 million yuan or roughly $676,000 of Century Cloud Core’s assets. 

The request was acquiesced on Sept. 25 to ensure that if the court rules in favor of Yongjiang, this amount could be claimed. Per the ruling, Shenzhen Century Cloud Core has the right to issue an appeal. For now, the length of time that the assets will remain frozen is still vague.

Note that the Shenzhen branch has not been caught up in a contract dispute with electronic component suppliers for the first time. For 2019 alone, there have been 4 of such events.

Youda Electronics is another complainant who, in an incident dating back in 2019, filed for asset protection. The court froze 5.2 million yuan ($745,000) assets of Bitmain’s subsidiary back then, although the result was made public only earlier in November this year.

This and further court cases threatened Bitmain and its branch back when the firm was dealing with the failing price of the crypt market. In December a year ago, the company also had several layoffs.

The company apprehended an internal meeting last month where Jihan Wu, its CEO, announced that during the time of the layoffs, the company had its vendors pressing for the clearance of account payables. This prompted many to wonder what Bitmain would have went through if, amid April and June 2019, crypto prices did not surge.

Wu acknowledged that if this had not happened, the 2018’s crypto winter would possibly have had terrible consequences. Since then, the firm has changed its sales tactic, aiming to make it more attractive to mining customers. This is particularly important because of the pending halving of Bitcoin’s block bonus, arranged for May 2020.

At this stage, Yongjiang’s commercial dispute complaint is the only one that is left, while all others have been withdrawn during 2019.

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