March 23, 2023

Investments in Bitcoin mining turned out to be a disaster for the Chinese company Wholeasy

Investments in Bitcoin mining turned out to be a disaster for the Chinese company Wholeasy

As a result of investments in Bitcoin cryptocurrency mining (BTC), the Chinese company Wholeasy owed $ 15 million and became a defendant in the fraud case.

In 2017, Wholeasy bought the companyCailiang, which developed mobile phone applications. In 2018, Cailiang acquired 100,000 Ebit E9 Plus Miner miners from the Ebang virtual currency mining device maker for $ 80 million. The organization then installed the equipment on the Mobcolor farm in the United States.

Last year, the company earned on Bitcoin miningabout $ 31 million, with a profit of only $ 3 million. Given the amount of investment, the Cailiang crypto project can be called a complete failure. In the first half of 2019, the company managed to make a profit of $ 3.5 million, despite the growth of the BTC rate. This fact is explained by two reasons:

  1. Ebit E9 Plus Miner has low performance compared to Bitmain's AntMiner S9;
  2. The Bitcoin blockchain hash has increased significantly, reaching a historic high of 100 EH / s in October.

Cailiang was sold to Wholeasy on the condition thatThe company's profit in 2019 will reach $ 10 million. After the first half of the year, the company had to earn $ 6.5 million to fulfill its obligations. But, given the decline in the cost of BTC, it is unlikely that Cailiang will be able to get a greater profit than in the first half.

The situation is aggravated by the fact that representativesEbang filed a lawsuit against Cailiang demanding a $ 15 million debt repayment and accused the equipment buyer of transmitting knowingly false information about the organization’s public status. Cailiang employees sent a counterclaim to the court, which stated that the seller delivered only 65,000 devices (instead of 100,000), so the company did not pay the remaining money. The first hearing on the sale of miners took place on November 26. Ebang lawyers provided documents on the supply of equipment and checks, and also stated that Cailiang lawyers are trying to accuse Ebang of fraud in order to transfer the case from civil proceedings to criminal. The verdict on the claim has not yet been issued.