Regulators Block Sale of Bitcoin Miner Avalon

A planned acquisition deal between Chinese manufacturer Shandong Luyitong and bitcoin mining hardware company Canaan is no more.

AccessTimeIconSep 29, 2016 at 3:00 p.m. UTC
Updated Mar 6, 2023 at 2:47 p.m. UTC
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UPDATE (15th October 21:30 BST): Following publication of this article, Canaan provided CoinDesk with the following statement:

"The Shenzhen Stock Echange (SZSE) authorities did not block the LYT acquisition deal of Canaan and did not perceive risks or uncertainties around either company or bitcoin as a technology. Canaan and LYT decided to cancel the acquisition deal due to standard regulatory changes in the securities market that made the deal face uncertainty for both parties."

The deal is said to have been scuttled as a result of apprehension on the part of regulators from the Shenzhen Stock Exchange, which was weighing whether to approve the deal, first revealed in June.

Representatives from Canaan said that following months of auditing, stock exchange officials balked because of the perceived risks and uncertainty surrounding both the company and bitcoin as a technology. Luyitong did not immediately respond to a request for comment.

Signs that the acquisition might face problems emerged weeks after it was first announced. At the time, Shenzhen Stock Exchange officials reportedly moved to scrutinize the deal more closely, according to local sources.

Had it been approved, the acquisition would have been the biggest in the bitcoin space to date, involving a publicly traded electronics maker and one of the earliest startups to develop hardware for mining.

Representatives from the firm struck a positive note in statements, saying that Canaan emerged stronger from a months-long auditing process.

CEO NG Zhang said in a statement:

"While Canaan spent time and resources pulling together this deal, those efforts are not wasted. They are contributions to our future. Internally Canaan strengthened its management structure, refreshed our public image, and have our product pipelines flowing to deliver solid reliable and efficient bitcoin technology solutions worldwide."

Best known for its Avalon series of bitcoin application-specific integrated circuits (ASICs), Canaan was the first to move a bitcoin ASIC to market, an event that changed forever the process by which competing parties race to add block of transactions to the network.

The company said that despite the acquisition deal falling through, plans to release a 16nm bitcoin ASIC are on track.

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