Co-Founder Quits Avalon Mining Chip Maker Canaan Over 'Differences'

Xiangfu Liu has left the board and management team of Canaan Creative, maker of the Avalon crypto miner.

AccessTimeIconFeb 12, 2019 at 5:00 p.m. UTC
Updated Sep 13, 2021 at 8:53 a.m. UTC

One of the three co-founders of Canaan Creative, maker of the Avalon cryptocurrency mining equipment, has stepped down from the Chinese company’s leadership.

According to government business registration data updated on Jan. 30, Xiangfu Liu will no longer serve as a board member at the Hangzhou-based Canaan Creative – a role he had served since 2013.

Further, a person familiar with the situation said Liu had left his day-to-day management role at the manufacturer and his executive board member position at its holding company, Canaan Inc., which unsuccessfully sought an initial public offering (IPO) in Hong Kong last year.

Canaan Creative did not respond to requests for comment. But the person close to the company told CoinDesk that Liu left his role due to disagreements with the company’s overall strategy.

Specifically, Canaan Creative’s management wanted to continue building the company as a pure-play manufacturer of chips for crypto mining and artificial intelligence. Unlike rival manufacturer Bitmain, Canaan does not mine crypto itself or run mining pools, and the leadership wanted to keep it that way, in order to justify the company’s sustainability for an IPO, the source said.

However, Liu, who has a background in computer science, believes hardware and software should not be separated entirely in the blockchain industry, meaning companies that make mining equipment should not cut themselves off from mining farms and pool businesses, the source said.

Major shareholder

Nevertheless, Liu, 35, remains a substantial shareholder of Canaan Creative. According to the now-lapsed Hong Kong IPO prospectus, Liu co-founded the firm with Nangeng Zhang and Jiaxuan Li in 2013.

While Zhang serves as Canaan’s chief executive officer, Liu was mainly in charge of the firm’s overseas business strategy and marketing, and he owns about 17.6 percent of Canaan’s total shares. In total, the three co-founders control over 50 percent of the firm.

Liu’s departure from the board also comes amid recent layoffs at Canaan, the source said, declining to disclose their scale.

But Canaan is far from alone in reducing staff, as other mining giants like Bitmain have also undergone layoffs as well as office closures, in part due to the overall bearish market conditions in 2018.

The news also comes weeks after a media report that Canaan Creative is now mulling an application to go public in New York after its initial IPO plan failed due to the hesitation of the Hong Kong Stock Exchange.

Canaan Creative image from CoinDesk's archives.


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