NEW FROM US– Ebang: Yet Another Crypto “China Hustle” Absconding With U.S. Investor Cash

(1/x) $EBON
$EBON is a China-based crypto company that has raised ~$374 million from U.S. investors in 4 offerings since going public in June 2020.

We think a majority of that investor capital has been diverted out of the company and is never coming back.
Before going public on NASDAQ, $EBON twice applied to list on the Hong Kong Stock Exchange.

Multiple media outlets reported that Ebang’s Hong Kong IPO plans were suspended following involvement in an alleged sales inflation scheme with a company called Yindou.
Yindou was a massive Chinese P2P online lending scheme that defaulted on its 20,000 retail investors in 2018, with $655M “vanish(ing) into thin air”.

Its ultimate beneficial owner “fled the country”, and Chinese prosecutors have been pursuing other suspects associated w/ Yindou
While $EBON represented that it would use the majority of its numerous capital proceeds to develop its business operations, our research discovered it instead directed much of the cash out of the company through a series of opaque deals w/ insiders & questionable counterparties.
$EBON directed $103M, representing ~$11M more than its entire IPO proceeds, into bonds linked to its U.S. underwriter AMTD (Chaired by Calvin Choi), which has a track record including (a) fraud and self-dealing allegations and (b) listings that have subsequently imploded.
AMTD entered into similar bond transactions with another company it recently took public in January 2020 called Molecular Data $MKD.

That company is down 70% since, has seen 6 board members and its co-founder resign, and had its auditor decline to stand for re-election.
In November 2020, $EBON tapped the market for its first secondary offering, announcing a $21M raise. It claimed proceeds would go “primarily for development”.

Around the same time, the company directed $21 million to repay related-party loans to Chairman/CEO Dong Hu’s relative.
$EBON claims to be a “leading bitcoin mining machine producer”, yet our research indicates this extraordinary claim is backed by no evidence.

Ebang released its final miner in May 2019 and has since seen its sales dwindle to near-zero, delivering only 6,000 total miners in 1H20.
With its mining machine business failing, $EBON has pivoted the story to a cryptocurrency exchange launch called “Ebonex”.

Announcements about the exchange added as much as $922 million market capitalization to Ebang.
We found that $EBON's exchange appears to be purchased from a white-label crypto exchange provider called Blue Helix that offers out-of-the-box crypto exchanges for as little as no money up-front.
$EBON’s exchange looks remarkably similar to other exchanges related to Blue Helix, like a popular exchange called Huobi.

We found numerous mentions of “Bhex” throughout the source code of $EBON’s exchange.
Ebonex reports what appear to be fictitious volumes. Despite just launching and having virtually no online presence, Ebonex volume data implies it is one of the largest spot exchanges in the world.

Yet its trading metrics are absent from well known crypto exchange trackers.
$EBON is yet another cautionary tale for inexperienced investors.

As is common with other China-based schemes, the co. will likely keep selling shares as long as investors are willing to keep buying them. We think this is a clear one-way street & the capital isn’t coming back.

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Hindenburg Research

Hindenburg Research Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @HindenburgRes

12 Mar
NEW FROM US: The Lordstown Motors “Mirage”: Fake Orders, Undisclosed Production Hurdles, And A Prototype Inferno $RIDE

Lordstown is an EV SPAC with no revenue and no sellable product, which we believe has grossly misled investors on both its demand and production capabilities. $RIDE
$RIDE has consistently pointed to its book of 100,000 pre-orders as proof of demand for its proposed EV truck.

Our extensive research reveals that the company’s orders appear largely fictitious and used as a prop to raise capital and confer legitimacy.
Read 19 tweets
9 Mar
In late February, we called $SOS an obvious shell game.

A new FAQ released by the company today, with some stunning admissions, makes this even clearer.

We earlier noted that HY International, a purported independent seller of crypto mining rigs, shared an address with an $SOS subsidiary.

Today, $SOS admitted HY was a shell company set up to supposedly preserve the confidentiality of the seller. Image
Despite the fact that HY is a now-admitted shell company, $SOS looks to have set up its website claiming HY has a diverse array of products and services, and that it is the largest secondary seller of mining rigs in the world. Image
Read 7 tweets
1 Mar
NEW FROM US– Ormat: Dirty Dealings in ‘Clean’ Energy $ORA

Today we reveal how ESG-darling $ORA, a developer and operator of geothermal power plants, has engaged in what we believe to be widespread and systematic acts of international corruption.
We expect the blowback to these revelations to be severe, threatening $ORA's contracts in its most lucrative markets. In fact, history is already catching up to Ormat’s senior leadership.
Read 26 tweets
26 Feb
We are short $SOS, which we believe to be an obvious China-based shell game reanimating the corpse of a former China based company that earlier imploded 90% from its highs.

We think SOS is a $0 and has significant regulatory risk. Image
Stocks tied to blockchain have been on the run lately, swept up in the euphoria of bitcoin breaking all-time highs.

$SOS has ridden this wave, reaching a market cap as high as $1.4b based on its claims of having pivoted into bitcoin mining and blockchain technology development. Image
We discovered $SOS principal office and headquarters doesn’t appear to exist. We visited the address listed in the company’s SEC filings and found it was a hotel.

A woman who worked for the hotel told us there were “no companies here”. ImageImageImage
Read 27 tweets
4 Feb
NEW FROM US: Clover Health: How the “King of SPACs” Lured Retail Investors Into a Broken Business Facing an Active, Undisclosed DOJ Investigation

cc @chamath $CLOV

Today, we reveal how Clover Health and its Wall Street celebrity promoter, Chamath Palihapitiya, misled investors about critical aspects of Clover’s business in the run-up to the company’s SPAC go-public transaction last month. $CLOV
Our investigation into $CLOV has spanned 4 months & more than a dozen interviews with former employees, competitors & experts, dozens of calls to doctor’s offices & a review of thousands of pages of government reports, insurance filings, regulatory filings & marketing materials.
Read 22 tweets
22 Dec 20
We are short $MVIS. In a market gone mad, this $1.2 billion market cap corporate husk with almost no revenue or intellectual property value is a standout.

It has risen 5,000% from lows this year on misguided retail euphoria over its LiDAR IP portfolio amid a broad EV bubble.
Retail investors have latched onto the company's portfolio of 250+ active patents, but an IP attorney we engaged found that only ~10 $MVIS issued patents even mention LiDAR.

Of those, many are oriented toward consumer/non-automotive use.
These patents haven't faced inter partes review (IPR) challenges yet, significantly reducing their value.

“No one buys patents these days for any real money unless the patents have been put through the test of at least an IPR,” our IP attorney told us.
Read 9 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!