Bit Mining Ltd. (aka 500.com): Reborn as a Crypto Hoax
Initiation Report: May 27, 2021
- BTCM has been losing money since 2015, a year after its IPO. We think that’s intentional.
- We’ll show that the crypto mining plan is end-to-end hype.
- We found that BTCM overstated by 650% the revenue of the offshore lottery business it bought then falsely blamed a regulatory change for plummeting income.
- The company has been through five lines of business and three auditors since its core business was banned in 2015. Crypto mining is the latest promote.
- BTCM is known in China for running low-level scams and Ponzis . Unfortunately, a lot of U.S. investors have not yet caught on to the grift.
BTCM directors are already gleefully selling based on a pump a scant five months old. The company brought founder Vincent Man San Law back as executive director in December and sold him massively discounted shares and later upped their voting power. He dumped $17 mln in shares almost immediately. Other insiders have sold around $6 mln in shares in Q1.
We believe the ASIC designer BTCM bought for $100 mln in stock is a channel for enriching the CEO of BTCM’s 54.2% subsidiary, Loto Interactive (8198 HK). Then there’s a mining pool in decline. There are out-of-date miners. And in acquiring a money-osing data center, BTCM could not resist passing some money to friends.
The Chinese government is attacking the whole value chain in crypto, and we think it will eventually ban crypto mining on environmental grounds.
BTCM appears to be scrambling to get out of China-- right after it spent a load of money on Chinese data centers. BTCM is investing in a mining center in Texas and another some place in Kazakhstan.
Until late February, when BTCM launched its crypto mining business, the majority of revenue came from an online lottery company based in Malta called The Multi Group. We will show that BTCM over-reported this group’s revenue by 650% on acquisition and that
Multi is still as fraudulent as ever.
BTCM is strapped for cash and has pledged its bitcoin for three-month debt. Despite reporting cash in the bank, BTCM is paying 6% for short-term loans.
The last auditor refused to sign off on the accounts because of a bribery case that has sent Japanese lawmakers to jail for accepting money from BTCM. BTCM conducted its own investigation and, shockingly, declared itself innocent.
In the hiatus between promotes, BTCM scams a few million here and there from investors. We will detail eight such transactions in which they have taken money out of the business.
J Capital Research ("J Cap") is a stock-research company. J Cap has analyzed the U.S.-listed company Bit Mining, Inc ("BTCM") and is hereby publishing the outcome and the conclusions of our analysis, based on publicly available information. We may be short shares of BTCM and, for this reason, there might be a conflict of interest.
© 2022 J Capital Research USA LLC. All rights reserved. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of J Capital. Use of this publication by authorized users is subject to the J Capital Authorized User Content Agreement available here. Use of this publication by non-authorized individuals is subject to the J Capital Non-Authorized User Content Agreement available here.