The share price of the Chinese bitcoin mining company Ebang continues to fall as the company denies allegations in a Hindenburg Research report of stealing money from US investors.
In a Hindenburg research report published on Tuesday, Ebang is described as “just the last chapter in the ‘Chinese hustle and bustle’ that hides as Bitcoin extraction. the activities of the Bitcoin Mining Company (BTC).
The funds raised in the financing rounds were allegedly redirected outside the company in a “series of opaque agreements with insiders and dubious counterparties.” Ebang describes itself as “the leading manufacturer of Bitcoin mining”, but according to a study from Hindenburg, the company has not launched a new product since 2019, and sales have declined steadily since then.
Together with Canaan Creative, Ebang is one of two Chinese bitcoin mining companies listed on the US stock markets. NASDAQ stock price: EBON’s stock price has fallen 20% since the beginning of the week. After trading at $ 6.35 on Monday, the stock fell to $ 5 in the vicinity of Tuesday, corresponding to a loss of 21%. Since then, the stock has returned to $ 5.03, bringing the weekly loss to more than 20%.
The Hindenburg report claims that Ibang saw the writing on the wall of his engraving work, which allegedly produced the worst machines for local competitors. It is then reported that the company has switched to a cryptocurrency exchange called Ebonex. The first announcement apparently increased EBON’s market value to $ 922 million.
Researchers from Hindenburg claim to have found that Ebonex was bought from a cryptocurrency exchange provider, called Blue Helix, which offers an advance-free exchange out of the box.
Since its launch just a few months ago, Ebonex shares have miraculously risen to one of the highest trading volumes in the world, despite the fact that they had no online presence at all. His alleged false numbers have not been recorded on cryptocurrency market trackers such as CoinMarketCap or CoinGecko, and Hindenburg calls it all “another warning story for inexperienced retail investors.”
The report asked for an official response from Ebang International Holdings Inc, which claimed that the review was full of speculation and anecdotal allegations. The announcement said that Epang would review the claims of Hindenburg and implement measures to protect investors.
“Based on the analysis carried out by the company’s management, we believe that the Hindenburg report contains many errors, unconfirmed assumptions and inaccurate explanations of incidents,” the statement said.
She added: “The board, together with the audit committee, intends to review and investigate the allegations and misinformation in them, and will take the necessary and appropriate measures to protect the interests of shareholders.”