Controversies
In 2015, Bitmain was involved in Hong Kong's first cryptocurrency-related litigation in the High Court (High Court Action No. HCA 1980 of 2015) when Bitmain sued one of the world's leading bitcoin trading platforms at the time. Bitmain accused the trading platform of "negligence and/or security issues".[30] At the commencement of proceedings, Bitmain's claim amount was around RMB 700,000. Bitmain's claim was later contested after it was revealed during the course of the litigation that serious issues of cyber-security neglect may have occurred on Bitmain's side when the transaction had been undertaken by Bitmain's staff (e.g. leaving on the auto-fill function while inputting wallet addresses, use of unsecured private networks, use of PRC banned software while conducting the transaction in PRC). The mining giant's claim ultimately failed and was discontinued after Bitmain suffered a series of interlocutory defeats (where its earlier default judgment was overturned and was even ordered to pay security for costs). As part of the terms of discontinuance, Bitmain was ordered to pay the trading platform's legal fees. The total legal fees that Bitmain had to pay the trading platform totaled over HK$1.3 Million, nearly double that of the initial claim amount.[31]
In 2017, Bitmain sued Zuoxing Yang, a former Bitmain chip design director who left Bitmain to launch Bitewei over patent rights infringements. In 2018, Yang's legal team successfully appealed to a court in China to have the patent revoked, after which Bitmain's case was dismissed.[32]
In 2018, a class action lawsuit of US$5 million was commenced by Los Angeles County resident Gor Gevorkyan against Bitmain where it was alleged that Bitmain mined cryptocurrency for its own benefit on its customers' devices.[33] It was alleged by the Plaintiffs in this case that Bitmain is benefiting—without authorization—from the lengthy "initialization" period that its ASIC [Application-Specific Integrated Circuit] devices need for set up: "Until the complicated and time-consuming initialization procedures are completed, Bitmain's ASIC [Application-Specific Integrated Circuit] devices are preconfigured to use its customers' electricity to generate cryptocurrency for the benefit of Bitmain rather than its customers."[34]
In 2018, Bitmain was involved in another legal dispute against a Labrador mining farm.[35] Bitmain Technologies sued Great North Data alleging problems from the start of the agreement between the two companies. Bitmain develops and produces miners where it operates some of its hardware out of third-party "mining farms". Great North Data provides space to companies like Bitmain to install and run their bitcoin mining equipment.[36]
In or about November 2019, the ousted co-founder of Bitmain, Micree Zhan, filed multiple lawsuits in the Cayman Islands and China against various entities of Bitmain in a bid to regain control of Bitmain. The lawsuit in China was accompanied by an asset-protection petition during which the PRC Court sided with Zhan to freeze 36 percent of Fujian Zhanhua's 10 million yuan incorporated shares owned by Bitmain, worth 3.6 million yuan, or $500,000.[37] This case highlighted what appears to be an ongoing power struggle between the two founders for control of Bitmain.[38]
U.S. sanctions
In January 2025, the United States Department of Commerce placed a Bitmain subsidiary, Sophgo, on its Entity List following reports that a TSMC-made chip was illegally incorporated into a Huawei artificial intelligence processor.[39]
