Another Bitmain? Multiple executives exit Canaan Creative, insiders say management seized power in internal struggle
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Another Bitmain? Multiple executives exit Canaan Creative, insiders say management seized power in internal struggle
An insider told Keji Zhaobao that Zhang Nangeng may have witnessed Bitmain's internal turmoil and is worried about becoming the next Jihan Wu.
Navigating Web3 tides with focused insightsSource | The Science and Technology Innovation Board Daily
Author | Chai Gang
As the former second-largest Bitcoin mining machine manufacturer, is its management now emulating Bitmain’s internal power struggles?
Recently, Hangzhou Canaan Intelligent Information Technology Co., Ltd. underwent business registration changes: former directors Kong Jianping, Sun Qifeng, and Li Jiaxuan, along with supervisor Tu Songhua, stepped down from their positions. Meng Lu has been appointed as the new supervisor. Meanwhile, Zhang Nangeng's title changed from "Chairman and General Manager" to "Executive Director and General Manager," and the company's liaison personnel shifted from finance staff Zhang Jing to Zhang Ning.
Multiple insiders told The Science and Technology Innovation Board Daily that these changes resulted from internal management conflicts—Zhang Nangeng in Beijing is fighting for control against the so-called "Hangzhou faction," which has now been marginalized. The company seal is currently under Zhang Nangeng’s control. Canaan Inc. may become the next Bitmain.
It was reported that the company recently integrated personnel across various business lines but has not carried out large-scale layoffs. When contacted for confirmation, Canaan Inc. officials did not provide a direct response.
In fact, signs of management discord at Canaan had emerged earlier. In January 2019, Canaan updated its business registration: Liu Xiangfu, one of the company’s three original co-founders and a director, exited the executive team. At the same time, supervisor Qin Fengling was replaced by Tu Songhua, who previously served as Director of Public Affairs.
According to Canaan’s prospectus submitted to the Hong Kong Stock Exchange, Liu Xiangfu held 17.61% of shares, making him one of the actual controllers and a core technical figure. He, together with the other two founders Zhang Nangeng and Li Jiaxuan, controlled the company through a joint action agreement.
Previous media reports indicated that Liu Xiangfu stepped down as director possibly due to strategic disagreements with the company. Unlike competitor Bitmain, Canaan does not engage in cryptocurrency mining or operate mining pools. Most executives preferred maintaining the status quo, aiming to build the company into a dedicated manufacturer of cryptocurrency mining and AI chips to better facilitate an IPO. However, Liu Xiangfu disagreed with this approach.
Although Liu Xiangfu’s departure didn’t attract as much attention as the high-profile feud between Bitmain’s Wu Jihan and Zhan Ketuan, it undoubtedly impacted Canaan.
Regarding this latest move by Zhang Nangeng to reduce Hangzhou’s influence, one insider told The Science and Technology Innovation Board Daily that Zhang might have taken lessons from Bitmain’s turmoil, fearing he could become another Zhan Ketuan.
Zhang Nangeng is the mastermind behind Canaan. As early as 2010, while pursuing his Ph.D. in computer science at Beihang University, he began researching Bitcoin mining machines and eventually dropped out to fully dedicate himself to mining hardware development.
In April 2013, Zhang Nangeng co-founded Beijing Canaan Yunzhi Information Technology Co., Ltd. with Li Jiaxuan. Liu Xiangfu joined in December of the same year. Kong Jianping and Sun Qifeng came on board in April 2015. In September 2015, Canaan relocated its headquarters to Hangzhou and renamed itself "Hangzhou Canaan Yunzhi Information Technology Co., Ltd."
Over the years, equity ownership and management saw multiple changes. By the end of 2019, Li Jiaxuan, Zhang Nangeng, Kong Jianping, Liu Xiangfu, and Sun Qifeng held 15.2%, 15%, 11.3%, 9.5%, and 5.5% of shares respectively.
As of July 8 closing, Canaan Inc. traded at $1.96, down 84% from its initial listing price of $12.60. Particularly since May 15, the stock has accelerated downward, plunging 67% within less than two months. During this period, the company’s six-month lock-up period expired in late May.
On May 14, U.S.-based research firm White Diamond released a short-selling report on Canaan Inc., claiming its then $850 million market valuation was inflated and predicting an 80–90% decline. The report argued that its next-generation mining machines lacked competitiveness and its attempts to pivot to AI chips would fail. Prior to that, on February 20, another short-seller, Marcus Aurelius Value, accused Canaan of concealing related-party transactions, frequent issues with customers and distributors, and an unsustainable business model—the “three major charges.”
On February 21, Schall Law Firm in Los Angeles, a shareholder rights litigation firm, alleged that Canaan violated securities laws and launched an investor investigation for compensation. Shortly afterward, another law firm, Rosen Law Firm, filed a lawsuit on behalf of investors who participated in Canaan’s IPO.
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