Former Canaan Directors to Guide Chinese Gaming Firm’s Pivot to Crypto Mining

Jan 5, 2021 at 11:15 a.m. UTCUpdated Jan 5, 2021 at 11:19 a.m. UTC

Canaan mining machine

(Canaan)

U.S.-listed Chinese gaming company The9 (NASDAQ: NCTY) has announced plans to enter the cryptocurrency mining space.

In an SEC filing, The9 said it had signed a legally binding “cooperation and investment” agreement with investors including two former directors of cryptocurrency miner maker Canaan (NASDAQ: CAN).
The company said it is working with the investors – led by Jianping Kong, former director and co-chairman of Canaan – to launch its new cryptocurrency mining operation via a wholly owned subsidiary called NBTC.
The9 is an internet and mobile gaming firm based in Shanghai.
“Our goal is to build up cryptocurrencies mining machines for The9 that will contribute 8% to 10% of the global hash rate of bitcoin, 10% of the global hash rate of ethereum and 10% of the global hash rate of Grin and become one of the world’s largest cryptocurrencies mining companies in terms of hash rate,” said Jun Zhu, chairman and CEO of The9.
The investment agreement will see the issuance of issue Class A ordinary shares and warrants bringing the right to purchase more shares in four tranches. The firm expects to raise around $34 million if all the warrants are exercised.
Following the announcement, The9’s shares spiked 87% to $6.62 per share.