The actions of the Chinese manufacturer of mining machines bitcoin Ebang fell sharply on Tuesday following a report from Hindenburg Capital qui claims the company misled investors about the investment allocations.
The long report alleges that out of the roughly $ 375 million the mining machinery maker has raised from investors since its IPO in June 2020, some 103 million dollars were spent on "bond purchases related to its American sister".
Actions d 'Ebang were down over 15% on news.
The report also claims that the company "allocated $ 21 million to repay loans to parties related to the chairman and CEO of Ebang Dong Hu 's relative. "In addition, the report states that the mining machinery sector is down, producing only 6,000 machines in the first half of 2020. See also: The actions of Ebang collapses after Hindenburg Research takes a short position
To consolidate its mining business (or, as Hindenburg puts it, to "turn the story "), Ebang launched a ryptocurrency exchange called Ebonex Monday .
Ebang did not respond to a press time request for comment. Hindenburg took a short position following its research, report reveals, and the company is trying to use Ebang as an example of a caveat emptor for Western investors jumping on publicly traded crypto stocks before doing their due diligence. Find out more: How Bitcoin Mining Works
On Wednesday, the Ebang team replied to the report by a press release from the United States Securities and Exchange Commission, complaining that the report was without merit.
"Based on Review by the company 's management team, we believe the Hinderburg report contains [sic] many errorss, unsubstantiated speculation and inaccurate interpretations of events. The board of directors of the company has also been informed of the Hindenburg report, ”the statement said.
"The Board, with its Audit Committee, intends to further review and examine the allegations and misinformation contained therein and will take all necessary and appropriate measures that may be necessary to protect the interests of its shareholders.
Updated April 7, 2021, 15:13 UTC: This article has been updated to include details of a press release from Ebang that refutes Hindenburg's report.