Hindenburg Research Shorts Chinese Bitcoin Mining Maker; Ebang Continues its Fundraising Spree

Hindenburg Research Shorts Chinese Bitcoin Mining Maker; Ebang Continues its Fundraising Spree

The short-seller argues Ebang makes “extraordinary claims” to be a market leader, which is “backed by no evidence,” resulting in EBON shares dumping.

Short-seller Hindenburg Research is shorting Chinese Bitcoin mining machine producer Ebang International Holdings. This sent the shares of the company (EBON) down 20% to $5.53. EBON shares have lost 63% of their value since the mid-March high.

Ebang made its debut on Nasdaq in June last year, and during this period, it has made three fundraising rounds, one in November and two in February this year alone, raking in $170 million in the last two.

According to Hindenburg, Ebang “claims” to be a leading bitcoin miner maker, but their research “indicates no evidence backs this extraordinary claim.” It further goes on to the point that ever since releasing its final miner in May 2019, its sales have been dwindling to near-zero, “delivering only 6,000 total miners in 1H20.”

The ongoing bull run has fueled a surge in fundraising in the crypto sector, which raised $2.6 billion in just three months, more than the amount raised in the entire last year.

Hindenburg has also been short on another Chinese blockchain company and took short positions in electric vehicle companies, including Nikola Corp, Lordstown Motors, insurer Clover Health, and Kandi Technologies Group Inc in the past year.

According to the firm, its research revealed that instead of using the capital proceeds to develop its business, Ebang has been moving the cash out of the company through “a series of opaque deals with insiders and questionable counterparties.”

Interestingly, this week, Ebang also announced the closing of its previously announced best-efforts follow-on public offering for the sale of 14 million units at a purchase price of US$6.10 per unit, for aggregate gross proceeds of approximately US$85.4 million.

The company intends to use its net proceeds to expand its crypto mining business and for the establishment and operation of the mining farms, crypto exchange, and general corporate purposes.

As we reported, Ebang announced the launch of its cryptocurrency exchange just this week, which Dong Hu, Chairman, and CEO of the company, said, “will not only expand the revenue sources from our cryptocurrency business but also optimize the development of our blockchain industry chain.”

Read Original/a>
Author: AnTy

Top Chinese Bank Launches Testing for a Digital Yuan “Hardware Wallet” Card

Top Chinese Bank Launches Testing for a Digital Yuan “Hardware Wallet” Card

  • Top Chinese bank launches testing of its “hardware card wallet” for the digital yuan.
  • The card is currently testing Dongcheng District – targeting the elderly.
  • Beijing residents testing the CBDC can also use the wallet to pay for healthcare services.

A local news report, Xinhua Net, confirmed that the Postal Bank of China has launched its biometric hardware wallet card for the digital yuan. The card is still in its testing phase to provide Dongcheng District residents with the ability to pay and transact using the central bank’s digital currency.

The hardware wallet provides users with biometric security to spend their digital yuan using a one-tap system on selected stores. Once the transaction is complete, the card’s ink screen window displays the transaction amount and the wallet balance.

The new card focuses on giving the elderly a more efficient way to use the digital renminbi given the challenges they face with smartphones, Chen Yuejin, Chairman of the Postal Bank of China, said.

“With this card, it is much more convenient to enter and exit public places, and you can pay with just one touch. It is especially suitable for the elderly who have difficulty using smartphones.”

China is the leading country in testing and piloting projects supporting its digital yuan. In the past two years, the government has launched several pilot projects on its CBDC in Beijing and Shenzhen – recently disbursing over $3 million in ‘red envelopes’ to over 50,000 people, the largest pilot yet.

The expedited process of piloting the digital yuan forces central banks around the world to look into launching their own CBDCs to avoid falling behind with China. Despite several analysts touting the digital yuan to replace the dollar, Martin Chorzempa of Peterson Institute for International Economics’ believes there is a long road ahead still.

He believes Chinese electronic payment services lay the toughest roadblock for the digital yuan to become internationalized. Chorzempa said,

“A lot of people talk about (the digital yuan) being a driver of renminbi internationalization.”

“I think they have to beat Alipay and WeChat Pay in China before, I think, that they can make a dent in the U.S. dollar.”

Read Original/a>
Author: Lujan Odera

More than 2,100 Bitcoin Mining Machines Auctioned by Chinese Local Court

More than 2,100 Bitcoin Mining Machines Auctioned by Chinese Local Court

Chinese local court has auctioned 2100 government seized Bitcoin mining machines.

The mining machine models on auction involved S9, S7, V9, T9+, Avalon 851, Avalon 6.01. of which there are more than 450 S9 units. These machines were seized from miners who were caught stealing electricity to mine Bitcoin and have been sentenced to up to 13 years in jail for that.

All the BTC seized were paid to the electricity company as compensation, reported cnLedger.

As for the mining machines, they were auctioned with a reserve price of only about 10,000 yuan ($15,000 USD) with a deposit of 2,000 yuan, and a price increase of 200 yuan.

The final price has been 702,600 yuan (about $108,850 USD) with hundreds of bidders looking to get their hands on the machines.

“The batch of mining machines has many models and different colors. It is not sure whether it can be used,” reads the rough translation of the special statement. It further says the bidder can see the samples on the spot with no guarantee from the court and “the buyer shall pick up the relevant items by himself at his own expense.”

Read Original/a>
Author: AnTy

Chinese e-Commerce Giant JD.com to Accept Digital Yuan in the 2nd Round of Public Trial

Chinese e-commerce giant JD.com said on Saturday that its fintech arm, JD Digits will accept digital yuan as payment for some products.

JD.com is China’s first virtual platform to accept the central bank digital currency, as part of an experimental giveaway of digital yuan to the citizens of Suzhou, according to the company’s post on its official WeChat account.

Under the trial, the People’s Bank of China (PBOC) and the municipal government will issue a total of 20 million yuan ($3 million). 100,000 consumers selected through a lottery will be receiving 200 digital yuan “red envelopes”.

This will be the second such program after the PBOC issued 10 million yuan worth of digital currency to 50,000 selected customers in Shenzhen in October, South China’s Guangdong Province. It was the first time the trail of digital yuan went public after a series of internal tests.

Last month, PBOC Governor Yi Gang said over 2 billion yuan had been spent using the DCEP so far in 4 million transactions.

The new round of public trials of the central bank-backed sovereign digital currency involves a wider range of consumer and application scenarios compared to the first test.

Booming Digital Industry

As we reported, the central bank of China is also discussing the technical pilot testing of digital yuan for cross-border payments with the Hong Kong Monetary Authority (HKMA). The exact date of the launch is unknown but it will offer an additional payment option, said Eddie Yue, chief executive of HKMA. Yue said  on Friday,

“As the yuan is already in use in Hong Kong and the status of digital yuan is the same as cash in circulation, it will bring even greater convenience to Hong Kong residents and tourists from the Chinese mainland.”

The central bank governor also said on Monday that China will push forward the R&D of the digital yuan in a steady manner, launch pilot tests in an orderly manner, and improve its legal framework.

According to Pan Helin, executive director of the Digital Economy Research Institute at the Zhongnan University of Economics and Law, 2021 will usher in an important period for the digital industry as the technologies have become more mature after several years of development. Pan told the Global Times,

“In recent years, China’s digital industry has been booming, and new technologies such as big data, cloud computing, 5G, artificial intelligence and blockchain have been rapidly developed and widely applied in various fields of social economy, laying a good foundation for the development and application of digital currency.”

Read Original/a>
Author: AnTy

China Stance on Crypto Remains The Same; Blockchain, Not Bitcoin

In a recent report by Chinese state media Xinhuanet, the Chinese government wants its citizens to stop paying attention to cryptocurrency but concentrate more on blockchain technology, the technology behind the cryptocurrencies.

China is emphasizing that the current rise of almost all crypto coins could seem very attractive to investors, which may not be permanent.

According to the media report, the warning is to protect the Chinese citizens and residents from making life-damaging investment decisions. However, it encourages citizens to invest more time and resources in Blockchain technology since it can be applied in various industries.

The past few weeks had seen the upsurge of Bitcoin price, as it moved above its previous all-time high achieved in 2017 when it reached $20,000 per Bitcoin. The same story goes for other cryptocurrencies. Some even tripled in price, representing massive investment profits for the crypto holder.

Bitcoin’s direction is uncertain

Various market analysts have predicted on the recent Bull Run and where the market is headed next. Some have even predicted that Bitcoin’s price could reach $100,000 soon, as market indices show.

However, China is advising its citizens not to throw their entire investment bag into Bitcoin because the market is highly volatile. Generally, the country is known to be a strong supporter and advocate of advanced technology. But this time, the government is making a distinction between blockchain and cryptocurrency.

Based on the publication, one of the reasons for the advice against cryptocurrency investment is that no one knows why Bitcoin is rising fast. As a result, the fall can be dramatic and very volatile for some investors to bear.

The Chinese government has always been very protective of its citizens when it comes to investments. In the shared post, the government described Bitcoin’s price as a “hype,” and the risk f trading on the top cryptocurrency is very high, according to the post.

Different views about blockchain and cryptocurrency

But when it comes to the technology behind Bitcoin, China is well known to be an ardent optimist. It has made concerted efforts to develop its blockchain industry and has gone a long way towards developing it’s Digital Currency Electronic Payment (DCEP) system.

The country has already passed the first stage of its DCEP testing. Additionally, China is in the process of developing its blockchain-based network service. Several public chains have already integrated into the network, including EOS, NEO, Tezos, and Ethereum. But it’s the negative stance of Bitcoin and cryptocurrency remains unchanged.

Read Original/a>
Author: Ali Raza

Huawei’s Flagship Phone, Mate 40, Will Support China’s Digital Currency Wallet On Launch

Huawei announces support for the upcoming Chinese central bank digital currency in its upcoming flagship smartphone, Mate 40. The smartphone will include a hardware wallet for the digital renminbi, a Weibo post stated.

The Chinese digital currency electronic payment (DC/EP) project was launched back in 2014, but tests only took to the public earlier this year. The project looks ready to go mainstream with the latest announcement of the Mate 40 supporting a digital wallet for the token. The smartphone offers users a self-custodial “hardware-level security, controllable anonymous protection, and dual offline transactions,” the statement on the Weibo post reads.

Huawei Mate 40

The latest Huawei support for the digital yuan follows a public test run across the country. The People’s Bank of China (PBoC) distributed over 10 million yuan to 50,000 random participants in Shenzhen in a public trial of the DC/EP system.

With the DC/EP, users can spend the digital yuan at any of the thousands of merchant stores that support it or at any point of sale devices with support for the token.

The post, however, did not clarify how the digital DC/EP project will work or how users could convert their bank balances and cash to the digital yuan using the Mate 40 hardware wallet. Moreover, it remains unclear if the Mate 40 smartphones in other regions will support the DC/EP wallet or restricted in some regions.

However, China is not the first state to release a national digital currency – being beat to the race by the Bahamas. The island nation announced a public launch of the “Sand Dollar” as the first public CBDC worldwide.

Read Original/a>
Author: Lujan Odera

China State-Owned Media Covers Crypto as 2020’s Best Performing Assets Driven by DeFi & Weak Dollar

In an unusual coordinated report on Friday, several Chinese state-owned media covered cryptocurrencies, calling them the best-performing assets of 2020.

The country’s top broadcaster, China Central Television (CCTV), ran a three-minute-long news clip, highlighting crypto assets rallying 70% this year.

“Cryptocurrency has undoubtedly become the top-performing investment” among several other global assets, said the report.

The clip also mentions DeFi and the weak dollar as the two reasons for the crypto bull market this year.

“China is just getting started on DeFi…” said a researcher at crypto fund The Spartan Group who noted the retail investors are likely to go for early DeFi projects in China like DODO and MCDex and the blue chips UNI, YFI, COMP, and MKR that also has a Chinese community.

CCTV also covered ETH being the top performer and fear of inflation driving the growth along with the central banks experimenting with CBDCs as a bull case for cryptocurrencies but government regulations being a major uncertainty.

“There is another following coverage today on CCTV2 abt PBOC encouraging accelerating DCEP adoption and enlarging beta test cases. So previously, coverage on ‘cryptoasset’s top performance’ seems to be related to this DCEP bull narrative in general,” noted Dovey Wan of Primitive Crypto.

A Bullish Affair

All of this got the Chinese crypto community’s attention, who shared the clip on WeChat as a bullish signal.

CCTV’s crypto reporting came after state-owned news agency Xinhua which also published an article titled, “Cryptocurrency is this year’s ‘No. 1 asset’” a day before. Prior to its digital version on Xinhua, the same article appeared on one of the longest-running state media, Cankaoxiaoxi, in print form.

Such a rare coordinated effort is at odds with China’s stance on crypto speculation, but trader Qiao Wage said it is a “misconception” that the Chinese government has always been “hostile” towards Bitcoin and crypto.

“If there was a parallel financial system that could rival the dollar-based system, they would love to be part of it. What they are hostile towards is fraud and speculative craze,” he said, adding, “I do agree with the view that they are against capital flight using crypto, which is pretty obvious.”

Yesterday, the South China Morning Post also reported of at least 1 trillion yuan ($145.5 billion) worth of funds moving out of China into gambling activities every year, aggravating the country’s economic and financial security risk, as per Liao Jinrong, the director-general of the International Cooperation Department under the Ministry of Public Security.

“The volume and speed of cross-border capital flows are unprecedented,” Zhu Min, head of the National Institute of Financial Research at Tsinghua University, was quoted by the People’s Daily mouthpiece this week.

“This will not only result in sustained fluctuations in major world currencies, but will also lead to higher volatility in global financial markets. Therefore, we must be prepared for potential risks,” he said.

Read Original/a>
Author: AnTy

Chinese Investors Turn to Yield Farming Despite The Recent Crash of DeFi Token Prices

Chinese investors are jumping onto decentralized finance (DeFi) despite the recent collapse in crypto markets. In an observation first published on Twitter by Chinese journalist Colin Wu, Chinese crypto exchanges are facing a log-jam of withdrawals as users rush to invest in DeFi tokens.

Over the past few weeks, searches for the word “DeFi” have skyrocketed on the popular Chinese messaging app, WeChat, reaching a high of 900k searches on September 7th. The increase in anticipation and demand for these tokens arises from the supernormal growth and APY returns offered by farming protocols, a trend Wu believes will continue in the future.

Wu also reported a shrinking liquidity pool on local crypto exchanges as investors withdraw large amounts of crypto to cycle them into DeFi. The withdrawals caused several exchanges to shut down operations to prevent a bank run on their liquidity pools.

The Chinese crypto community has since responded to exchanges locking them out of their fund’s launching, a “coin withdrawal campaign.” The campaign calls on all investors from troubled centralized crypto exchanges to withdraw their tokens and “delete their trading accounts.”

Data shows the reserves of crypto exchanges present in China have been depleted with the rise of decentralized finance. Following a massive bull run on the majority of “farming tokens,” the recent slowdown in price has seen Chinese investors rush to fill their bags with ETH in preparation for the net mega bull run. Colin Wu wrote on Twitter,

“[…]The recent sharp drop in the price of ETH, many users buy bottoms on exchanges and then transfer to DEX for farming. The stock of ETH and other farm cryptos on the exchange is falling frantically.”

According to Wu, these exchanges are being forced to list these DeFi farming tokens to keep the investors on their platforms and prevent the move to DEXs.

The DeFi ecosystem has a total locked value (TVL) of $7.7 billion, falling from an all-time high of $9.5 billion recorded earlier in September, according to DeFi Pulse. The DeFi ecosystem started off the year with a TVL of $674 million, experiencing over 9X growth in the past nine months or so. With Chinese investors getting into the ring, the DeFi space could be set for another soar in the near future.

Read Original/a>
Author: Lujan Odera

Huawei and Beijing Municipal Government Collaborate to a Build Blockchain-Governed Smart City

Huawei, the Chinese tech giant, has partnered with Beijing Municipal government to develop a blockchain-governed smart city to improve service delivery and data-sharing. This initiative comes as China intensifies its tokenomics dominance with the DC/EP set to be rolled out in major cities such as Beijing. Notably, the two entities have been working together since 2019; a recent official report on the project highlighted that it is still in trial phases.

Huawei & Beijing’s Blockchain-based Directory

The blockchain-based public directory by Huawei and Beijing Municipal government leverages the former’s Cloud Blockchain ecosystem for real-time data sharing and management. It will link over 50 municipal agencies and support cross-departmental communication as well. In doing so, Beijing authorities are optimistic about enhancing trust through verification as per the technical fundamentals of blockchain tech.

The project is, therefore, set to play an important role, especially within the healthcare niche where COVID-19 responsive services are dependent on communication. Other areas set to benefit are real estate transfers, appeals to city government rulings, fundamental risk assessment, and finding local parking spots hence a direct trickle-down effect to Beijing natives.

Huawei Still China’s Tech Poster Boy

This Chinese tech conglomerate has not been short of controversy, with most of the pressure coming from the western world. Nonetheless, Huawei appears to be thriving in China’s market as well as emerging markets in African countries where it has partnered with the most significant service providers. The recent milestone in being part of Beijing’s shift towards a smart city further confirms the firm’s position as a leading tech in China despite criticism from International foes.

Read Original/a>
Author: Edwin Munyui

Four Top Chinese State-Owned Banks Are Testing The Chinese Digital Yuan Project (DCEP)

In an unconfirmed report, four Chinese state-owned banks are gradually testing the ‘digital renminbi’ wallet app and Digital Currency/Electronic Payment (DCEP) system in different provinces across the country.

The reports, though unconfirmed, follow the recent comments by the People’s Bank of China (PBoC) confirming the “closed pilot of the digital RMB was completed” with plans to launch research on the legal digital currency underway in this second half of the year.

It was first revealed by a local newspaper, 21st Century Business Herald, who spoke with some of the employees working on the app. As reported, the app is in extensive scale testing in Shenzen and other parts of the country with four major banks – China Construction Bank, Bank of China, Industrial and Commercial Bank of China and Agricultural Bank of China – participating.

According to the report, users will need to have to open a digital account with either of the four banks to register the app. The digital wallets are then linked to various banks allowing the users to recharge their accounts and also spend on different utilities directly – similar to Alipay and WeChat payment services.

However, the app is still not publicly available for downloads as one respondent confirmed:

“Our bank is testing the ‘digital renminbi’ app on a large scale. The app cannot be downloaded publicly for the time being, and it has an identity code after opening it.”

The app allows users to transfer amounts to others by using their phone number or a QR code, pay, save, and spend RMB digitally across several merchants across China.

Read More: Will China’s CBDC See Strong Adoption Or Will Dollar Pegged Stablecoins Cause Resistance?

China has, in the past, hastened its efforts in launching a legal digital currency since the announcement of the Libra project, championed by Facebook. The leading committee on the digital currency, Central Bank’s Digital Currency Research Institute, launched closed pilot tests in Shenzhen, Suzhou, Xiong’an, and Chengdu in preparation for a Winter Olympics 2022 date release.

Moreover, the CBDC is in testing on Tencent Holding’s food delivery app, Meituan Dianping, as well as the Chinese Uber, Didi Chuxing, which are processing billions of dollars annually. China’s hastened launch of its DCEP project aims to reduce the dollar-influence across the country and East Asia.

Read Original/a>
Author: Lujan Odera