The share price of Chinese Bitcoin (BTC) mining corporate Ebang continues to fall, whilst the company refutes claims made in a Hindenburg Research file which alleged it used to be pilfering American traders’ money.
The Hindenburg Research file, printed April 6, described Ebang as “simply the latest chapter in the ‘China Hustle’ disguised as a Bitcoin mining play.” The file alleges that Ebang raised masses of hundreds of thousands of greenbacks thru public choices within the United States beneath the guise of working as a Bitcoin mining corporate.
The cash raised within the investment rounds used to be reportedly funneled out of the corporate in “a series of opaque deals with insiders and questionable counterparties.” Ebang describes itself as a “leading Bitcoin mining machine producer,” but in line with Hindenburg’s analysis, the company hasn’t launched a brand new product since 2019, and its gross sales have dwindled continuously since.
Ebang, together with Canaan Creative, is one in every of simplest two Chinese Bitcoin mining firms publicly traded on U.S. inventory markets. The share price of NASDAQ: EBON fell 20% for the reason that get started of the week. After buying and selling at $6.35 on Monday, the share price had dropped to $5.00 by way of Tuesday’s shut, equating to 21% losses. The inventory has since bounced again to $5.03, leaving weekly losses in far more than 20%.
The Hindenburg file alleges that Ebang noticed the writing used to be at the wall for its mining rig industry, which used to be mentioned to provide inferior machines to native competition. The corporate is claimed to have then spun itself right into a cryptocurrency trade, dubbed Ebonex. The preliminary announcement it seems that boosted the EBON marketplace cap by way of $922 million.
Hindenburg researchers declare to have came upon that the Ebonex trade used to be bought from a crypto trade provider supplier known as Blue Helix, which provides “out-of-the-box” exchanges for no cash prematurely.
After launching simply months in the past, Ebonex miraculously soared to document one of the crucial very best business volumes on the planet, regardless of having no on-line presence in any way. Its allegedly fictitious figures aren’t recorded on crypto marketplace tracker web pages like CoinMarketCap or CoinGecko, and Hindenburg refers back to the complete affair as “yet another cautionary tale for inexperienced retail investors.”
The file brought on an professional reaction from Ebang International Holdings Inc, which claimed the overview used to be stuffed with hypothesis and unsupported claims. The announcement mentioned that Ebang would read about the claims made by way of Hindenburg, and take the essential steps to give protection to its traders.
“Based on the review by the Company’s management team, we believe that the Hindenburg Report contain many errors, unsupported speculations and inaccurate interpretations of events,” mentioned the announcement.
It added, “The Board, together with its Audit Committee, intends to further review and examine the allegations and misinformation therein and will take whatever necessary and appropriate actions may be required to protect the interest of its shareholders.”