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Ebang refutes Bitcoin ‘China Hustle’ claims as share price falls 20%

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The share price of Chinese language Bitcoin mining firm Ebang continues to fall, whereas the agency refutes claims made in a Hindenburg Analysis report that alleged it was pilfering American buyers’ money.

The Hindenburg Analysis report, revealed on Tuesday, described Ebang as “simply the latest chapter in the ‘China Hustle’ disguised as a Bitcoin mining play.” The report alleges that Ebang raised lots of of tens of millions of {dollars} via public choices in the US below the guise of working as a Bitcoin (BTC) mining firm.

The cash raised within the funding rounds was 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 agency hasn’t launched a brand new product since 2019, and its gross sales have dwindled steadily since.

Ebang, together with Canaan Artistic, is certainly one of solely two Chinese language Bitcoin mining corporations publicly traded on U.S. inventory markets. The share price of NASDAQ: EBON has fallen 20% for the reason that begin of the week. After buying and selling at $6.35 on Monday, the share price had dropped to $5.00 by Tuesday’s shut, equating to 21% losses. The inventory has since bounced again to $5.03, leaving weekly losses in extra of 20%.

The Hindenburg report alleges that Ebang noticed the writing on the wall for its mining rig enterprise, which was mentioned to provide inferior machines to native opponents. The corporate is alleged to have then spun itself right into a cryptocurrency trade, dubbed Ebonex. The preliminary announcement apparently boosted the EBON market cap as much as $922 million.

Hindenburg researchers declare to have came upon that the Ebonex trade was bought from a crypto trade service supplier known as Blue Helix, which affords “out-of-the-box” exchanges for no cash upfront.

After launching simply months in the past, Ebonex miraculously soared to report a number of the highest commerce volumes on this planet, regardless of having no on-line presence in anyway. Its allegedly fictitious figures are usually not recorded on crypto market tracker web sites like CoinMarketCap or CoinGecko, and Hindenburg refers back to the complete affair as “yet another cautionary tale for inexperienced retail investors.”

The report prompted an official response from Ebang Worldwide Holdings Inc, which claimed the evaluation was filled with hypothesis and unsupported claims. The announcement said that Ebang would look at the claims made by Hindenburg and take the mandatory steps to guard its buyers.

“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,” said 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.”

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