China’s BIT Mining Enters Agreement to Raise $50M Private Placement

BIT Mining Limited, a cryptocurrency mining company, announced today it has entered securities purchase agreements to raise $50 million in a private placement, the company said. 

HC Wainwright & Co, a New York City-based investment bank focused on capital markets and equity research, will be the sole placement agent for the offering. It is expected to close on or about July 16, the company said in a statement. 

The company said proceeds are going to be used to acquire additional mining machines, create new data centers overseas, expand its infrastructure and boost its working capital position.

BIT Mining, formerly known as 500.com before changing its name in April 2021, is based in Shenzhen, China and focuses on cryptocurrency mining, mining pools, and data center operations. It owns the entire mining pool business operated under BTC.com and has the third-largest mining pool, according to publicly available data.   

The company was not available for immediate commentary request by Blockworks on July 12. 

The agreements to raise money are with institutional and accredited investors and under terms of the private placement. Additionally, the company said it will issue 100 million Class A ordinary shares and warrants to purchase up to an additional 100 million shares for investors at a price of $5 per ten shares, with one warrant included in the price of each share.

The warrants will have a term of three years and will be exercisable for six months following their issuance date at an exercise price of US$6.81 per ten Class A ordinary shares, it said. Ten shares can be converted into one American depositary share of the company if certain conditions are satisfied, it added. 

Recently, China has renewed its crackdown on the cryptocurrency industry. In the most recent push, The People’s Bank of China (PBoC) told key financial institutions to block all cryptocurrency transactions, which was one of several anti-crypto efforts by the country’s government to impede trading of the digital currencies, Blockworks previously reported. Additionally, China’s Qinghai province issued a ban on cryptocurrency mining operations in June and over 90% of China’s bitcoin mining is estimated to be shut down, according to a report. 

The securities for the private placement are not applicable to US-based securities laws and are not able to be offered or resold in the US except if it’s a part of an exemption from the requirements of the Securities Act of 1933 and applicable state securities laws, it said. 

In mid-May, BIT Mining invested $25.74 million in a cryptocurrency mining data center in Texas to jointly construct and operate the Texas Mining Center with Dory Creek.

Separately, BIT Mining’s stock (BTCM) was added to the MSCI China Small Cap Index in late May, in addition to the New York Stock Exchange. Its shares on NYSE were down 15.61% to $5.73 as of 10:40 am ET on July 12.