Maker of First Bitcoin Mining ASIC Acquired in What Could Be Industry's Largest Sale

NEWS
Stan Higgins
Jun 8, 2016 at 20:14 UTC  |  Updated  Jun 9, 2016 at 18:24 UTC

The China-based company behind the first bitcoin mining ASIC has been acquired, though the exact details of the sale vary.

Canaan Creative, the company that produces the Avalon chip series, confirmed its acquisition by Shandong Luyitong Intelligent Electric PLC today in an email to CoinDesk. Shandong Luyitong is an electronics firm founded in 2003, and that is publicly listed on the Shenzhen Stock Exchange.

As for the exact amount paid in the acquisition, initial statements from parties involved or close to the deal indicate it could be the largest-ever exit for bitcoin startup.

According to news source Ifeng.com, Shandong Luyitong paid ¥3.06bn (roughly $466m) in stock purchases and cash to acquire 100% ownership of the firm. Further, it said Shandong Luyitong is planning a private share offering in conjunction with the sale, looking to sell as many as 6.79 billion shares at a price of ¥24.57 per share.

In a separate Twitter post, Jihan Wu, CEO of China-based bitcoin mining firm Bitmain, reported that the firm was to be publicly listed through its relationship with Shandong Luyitong, and that it is seeking to raise ¥0.67bn at a valuation of ¥3.1bn.

Representatives of Canaan did not immediately provide more details, stating they were unable to disclose more than what is public at this time.

The Avalon chip was the first application-specific integrated circuit (ASIC) designed for bitcoin mining to hit the market, or the process by which new transaction blocks are created on the bitcoin network. Canaan Creative was founded in 2012, releasing its first Avalon chip the following year.

The company has made no official announcement about the deal through its social media channels. Shandong Luyitong did not immediately respond to requests for comment.

Image Credit: Canaan Creative

Update: This article has been amended to reflect that the Avalon was the first ASIC to hit the market, while several other companies were also developing chips.

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