Ebang Worldwide (EBON) – Get Report shares plunged Tuesday after analysts at Hindenburg Analysis, a famous brief vendor, accused the China-based cryptocurrency group of the illicit use of capital raised from U.S. traders.
Hindenburg, which stated it has a brief place in Ebang, stated the group directed $103 million — most of which was raised from its June 2020 IPO — into “bond purchases linked to to AMTD (Worldwide)”, a Hong Kong-based underwriter, and an extra $21 million to “repay related-party loans to Ebang Chairman/CEO Dong Hu’s relative.”
Ebang’s recently-launched cyrptocurency alternate, Ebonex, stories what seems to be “fictitious volumes”, Hindenburg stated, that suggests it is one of many largest spot exchanges on the earth “regardless of having no on-line presence.”
Officers at Ebang Worldwide weren’t instantly obtainable for remark when first contacted by TheStreet.
“Ebang is yet one more cautionary story for inexperienced retail traders enthused by something crypto-related,” Hindenburg stated. “As is so frequent with different ridiculous China-based schemes, the corporate will doubtless maintain promoting shares so long as traders are keen to maintain shopping for them. We expect this can be a clear one-way avenue, and the capital isn’t coming again.”
Ebang shares have been marked 18% decrease in pre-market buying and selling Tuesday to alter arms at $5.22 every. The shares traded as excessive as $14.95 every earlier this yr.
China-based corporations raised almost $12 billion from U.S. IPOs final yr, based on knowledge compiled by Renaissance Capital, probably the most since 2014, as corporations rushed to market forward of rule modifications below the ‘Holding Overseas Corporations Accountable Act (HFCA)’ that will require U.S. authorities to overview audit information of abroad corporations previous to their itemizing.