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Canaan Sued Over Alleged ‘Fake’ Deal, Stock Sees Historic Low

While the current climate seems uneasy for all cryptocurrency businesses, some of them have to deal with extra difficulties.


Earlier this month, investors filed a class-action lawsuit against Canaan, a Nasdaq-listed cryptocurrency mining hardware producer. The case is largely based on a February report submitted by an analysis organization called Marcus Aurelius Value, which argued that the mining firm has made misleading statements regarding its financial health.




The second-largest Bitcoin mining operation is in trouble


Canaan is considered to be the second-largest Bitcoin (BTC) mining machine manufacturer in the world. The firm was established in 2013 by Nangeng Zhang, also known as “Pumpkin Zhang.” Earlier that year, his team allegedly engineered and produced one of the first cryptocurrency mining devices based on ASIC technology.


Being considerably louder and more power-consuming than amateur mining setups based on graphics processing units, ASIC rigs are purpose-built to mine Bitcoin on an industrial scale. In turn, ASIC machines have turned Bitcoin mining into a capital-intensive business run by a limited pool of players. Read More