The Paradise Papers suggest Xiaomi founder Lei Jun is connected to Bitmain, the world s largest bitcoin miner

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Update (Nov. 27): Lei Jun denies investing ter bitcoin or Bitmain, Bitmain says the entity linked to Lei Jun ter the Paradise Papers is not a shareholder.

Lei Jun amassed a $7 billion fortune by making stylish, affordable smartphones under the Xiaomi brand. He&rsquo,s now one of China&rsquo,s richest guys, and is often considered China&rsquo,s response to Steve Jobs, for his emphasis on vormgeving and the wild success of Xiaomi handsets te a crowded market. It turns out he may be adding to his fortune via the lucrative world of bitcoin mining, through a connection to the world&rsquo,s largest manufacturer of bitcoin-mining equipment, Beijing-based Bitmain.

A connection inbetween Lei Jun and Bitmain is interesting because the tech billionaire has never publicly voiced an rente ter cryptocurrencies. If Lei is connected to Bitmain, it would be the omschrijving of an Elon Musk or Jeff Bezos exposing a stake te a bitcoin rigid&mdash,conferring a major stamp of legitimacy for cryptocurrencies. Bitmain, for its part, has always maintained that it is self-funded, primarily through co-founder Jihan Wu&rsquo,s early bitcoin holdings, having only recently raised outside funds from blue-chip VCs Sequoia and IDG.

The nature of Lei Jun&rsquo,s connection to Bitmain isn&rsquo,t entirely clear. According to a database of information from the Paradise Papers leak maintained by the International Consortium of Investigative Journalists (ICIJ), two entities that Lei Jun controls are related to a rock hard called Beijing Changtong Wuxian Consulting Company. Beijing Changtong is ter turn connected to four entities managed by Bitmain&rsquo,s co-founders, Wu and Micree Zhan.

Beijing Changtong&rsquo,s connections to Bitmain-related firms are classified by the ICIJ spil &ldquo,other.&rdquo, According to the ICIJ, the entities linked to an &ldquo,other&rdquo, entity are part of the same holding group. This could mean that Lei Jun&rsquo,s vehicles are part of a holding group with the Bitmain founders&rsquo, firms, under the umbrella of Beijing Changtong. A Bitmain spokesman said that Beijing Changtong is not a Bitmain shareholder. &ldquo,Thesis claims are not true. Wij used to hire the same lawyer spil Lei Jun did. That may have caused this misunderstanding,&rdquo, the spokesman said. Xiaomi declined to comment when contacted by Quartz. But Lei Jun posted on social media today (Nov. 27) that he has not invested ter bitcoin or manufacturers of bitcoin miners, according to the South China Morning Postbode. The ICIJ did not react to a request for clarification. Xiaomi declined to comment.

Here&rsquo,s the rundown of connections ter the Paradise Papers database:

Bitmain claims to have manufactured about 70% of the world&rsquo,s bitcoin-mining equipments. Bitcoin miners commit vast computational resources and use big amounts of electric current to unlock some of the $20 million (more or less, depending on the price of bitcoin) that the bitcoin network dispenses each day to miners. The bitcoin network is estimated to consume spil much electric current spil a puny country each year. Oman is the closest omschrijving right now.

Bitmain predominates bitcoin mining. Besides manufacturing specialized equipments, it also designs the silicon that goes ter them. It operates mining pools, permitting individual miners to add their processing power to a larger entire, thus improving their chances of a payout. It also rents out processing power to clients, and mines for its own account, operating vast gegevens centers ter China&rsquo,s Internal Mongolia and Xinjiang autonomous regions, where tens unit, land, and labor are cheap.

Bitmain emerges to be hugely profitable. It very likely paid up to $400 million last year to TSMC, the world&rsquo,s largest contract manufacturer of chips, to fabricate custom-designed silicon for its AntMiner bitcoin-mining equipments. On its last earnings call, TSMC exposed that cryptocurrency clients account for 5% of its revenues. Bitmain is the only known equipment manufacturer with a TSMC contract. One estimate by noted bitcoin analyst and developer Jimmy Song pegs Bitmain&rsquo,s profit from selling its newest equipments at up to $250 million this year. That could well represent another winning investment for Lei Jun.

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