Hall of Shame

Consumer Discretionary

BIT Mining Ltd (BTCM US)

Year: 2021


BIT Mining Ltd, formerly 500.com Ltd, is a China-based company principally engaged in cryptocurrency mining. The Company mainly operates cryptocurrency mining machines for the sole purpose of mining cryptocurrencies (primarily bitcoin, and to a lesser extent ether). In addition, the Company provides a comprehensive sports information portal through designated mobile applications, including real-time football match information and data-driven football match predictions generated by a proprietary analysis engine. The Company provides online spot commodity trading services through designated websites and mobile apps of its holding subsidiaries, provides online spot commodity trading for customers for gold trading, and provides delayed products on personal computers and mobile devices. The Company also provides online lottery betting and online casino platforms through its designated websites.

500.com Ltd listed on the New York Stock Exchange, in 2015, under the ticker WBAI. It operated as an online sports lottery service provider in China. It offered a comprehensive and integrated suite of online lottery services, information, user tools and virtual community venues to its users. 500.com was among the first companies to provide online lottery services in China.

December 31, 2019 Chairman Xudong Chen resigned and CEO, Zhengming Pan temporarily stepped down amid an investigation into whether the company bribed lawmakers in Japan involved in legalizing casino gambling there. The Company was suspected of bribing Tsukasa Akimoto, a Liberal Democratic Party lawmaker deeply involved in crafting the country's gaming policy, who Tokyo prosecutors had arrested. The Company announced it had formed a Special Investigation Committee to internally investigate alleged illegal money transfers and the role played by consultants following the arrest of one consultant (also a former director of the Company's subsidiary in Japan) and two former consultants by the Tokyo District Public Prosecutors Office.

September 23, 2020 Auditors, Friedman resigned because of a disagreement with the management on the effectiveness of the Company's internal control over financial reporting in light of the alleged unlawful payments.

October 7, 2020 The Company announced that the Special Investigation Committee (SIC) had completed its internal investigation  Based on the findings and analyses the SIC has concluded that it did not find a sufficient basis to establish a violation of the US Foreign Corrupt Practices Act of 1977 in connection with the Company's prior activities in Japan.

April 5, 2021 the Company changed its name to BIT Mining Ltd and ticker to "BTCM" to reflect its change of focus to becoming a leading cryptocurrency mining enterprise in China.

May 27, 2021 J-Capital Research (J-Cap) issued a report on the company; "BTCM: It Keeps Coming Back - Now It's Trying the Crypto-Hoax Space".  The report raised a number of points on the company as follows:

  • J-Cap believed that BIT Mining had been losing money since 2015, a year after its IPO. It thought that it was intentional.

  • J-Cap's research showed that the crypto mining plan was end-to-end hype.

  • J-Cap found that BIT Mining overstated, by 650%, the revenue of the offshore lottery business it bought. It then falsely blamed a regulatory change for plummeting income.

  • The company had been through five lines of business and three auditors since its core business was banned in 2015. Crypto mining was the latest promote.

  • BIT Mining was known in China for running low-level scams and Ponzis. J-Cap believed that, unfortunately, a lot of U.S. investors had not yet caught on to the grift.

In summary, J-Cap believed that BIT Mining's previous Lotto business was a scam and that the move to the crypto business was another effort to pump the stock and enrich insiders.


Nikkei Asia: China-backed 500.com - The Company tied to Japan's casino scandal, 25 Dec 2019
J-Capital: BIT Mining Ltd – Trying the Crypto Hoax Space, 27 May 2021
BIT Mining Ltd: Annual Report YE Dec. 2020
BIT Mining Ltd: Annual Report YE Dec. 2019
BIT Mining Ltd: Annual Report YE Dec. 2018
SEC: BIT Mining Ltd Filings 
Newswire: BIT Mining Ltd News


 

Auditors

Company From To
Ernst & Young 2013' 1-Feb-18
Friedman 9-Feb-18 23-Sep-20
MaloneBailey 27-Sep-20 -

Advisors

(IPO - Initial Public Offering, ASO - Additional Share offerings)

Type Date Role Party
IPO 22-Nov-13 Auditor(s) Ernst & Young
IPO 22-Nov-13 Co-Manager(s) Oppenheimer & Co
IPO 22-Nov-13 Co-Manager(s) Piper Jaffray & Co
IPO 22-Nov-13 Legal Adviser to the Issuer(s) Simpson Thacher & Bartlett
IPO 22-Nov-13 Legal Adviser to the Issuer(s) Han Kun Law Offices
IPO 22-Nov-13 Legal Adviser to the Issuer(s) Maples Group
IPO 22-Nov-13 Legal Adviser(s) to the Manager(s) Commerce & Finance Law Offices
IPO 22-Nov-13 Legal Adviser(s) to the Manager(s) Shearman & Sterling LLP
IPO 22-Nov-13 Sole Manager Deutsche Bank

Directors

(CAC/MAC Chairman / Member Audit Committee - NC Nomination /Governance Comm. - CC Compensation/Remuneration Committee)

Type Name Role From To
Executive Xianfeng Yang CEO 21-Dec-20 -
Executive Zhengming Pan CEO, President, MNC 15-May-15 2-Feb-20
Executive Shengwu Wu Chairman, MCC 30-Dec-19 -
Executive Huixuan Wang Chiarman, MCC Aug.2018 1-Jun-19
Executive Xudong Chen Chiarman, MCC 1-Jun-19 30-Dec-19
Executive Man San Vincent Law Founder Apr. 2021 -
Independent Qian Sun Aug.2016 -
Independent Angel Yan Ki Wong CAC 22-Nov-15 -
Independent Honghui Deng MAC, MCC May.2011 -
Independent Yu Wei MAC, MNC 21-Nov-13 -
Non-Executive Bo Yu CCC, CNC 20-Jan-17 -
Senior Management Qiang Yuan CFO 18-Dec-17 -
Senior Management Zhaofu Tian CTO, Interim CEO Oct.2012 31-Dec-20

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