It’s the undisputed king of Bitcoin mining, but Bitmain may have misrepresented its figures severally in the past one year. The company reported net profits at $1.25 billion for 2017 during a funding round early this year. However, the figure was revised downward during a subsequent funding round. In its IPO listing documents presented a month ago, the figure had come down to almost half the original figure. Were the discrepancies deliberate and meant to raise more money remains the question and Bitmain is yet to shed light on the issue.

Deception Or Accounting Mistakes?

Founded in 2013, Bitmain has been the dominant figure in the crypto mining sector, with its chips accounting for at least 75 percent of all cryptos mined. The company also operates the two largest Bitcoin mining pools. However, according to a new report, the firm may have exaggerated figures presented during two funding rounds this year.

According to the report by The Financial Times, Bitmain reported 2017 profits as $1.25 billion in April this year. At the time, the company was undertaking a funding round led by the renowned Sequoia Capital. A few months later, the company held another funding round, this time reporting the 2017 profits as $1.1 billion.

While the two figures differed slightly, it was the figure that it stated in September during its IPO filing that raised eyebrows. According to the IPO prospectus, the company reported its 2017 net profits as $701 million. This was close to half the original reported figure!

FT reached out to the Beijing-based Bitmain to inquire on the discrepancies. The firm declined to offer an explanation, instead opting for: “Please refer to our IPO prospectus for appropriate figures.”

The publication then reached out to the Bitmain’s auditor, KPMG who declined to comment. China International Capital Corp., the bank that’s in charge of the IPO also declined to comment on the discrepancies.

While some have regarded the differing figures as a red flag for the company, others think it’s merely a young company without much expertise in the market. One of these is a Beijing based venture capitalist, who requested his name be withheld. Speaking to FT, he stated:

“The differing figures show that management doesn’t know how to communicate with the capital markets. It just shows that they are not sophisticated enough and maybe too aggressive.

It remains to be seen whether the confusion will be put to bed by the management  and if it will have a bearing on the looming IPO of the $18 billion-valued firm.

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