Shareholders of Ebang International Holdings ($EBON) are feeling the heat as the share price searches for a bottom.

  • Ebang is down 66% since listing on the NASDAQ.
  • Ebang cryptocurrency exchange – Ebonex may be a flop.

Ebang is a China-based application-specific integrated (ASIC) chip design company and a manufacturer of Bitcoin mining machines. Since listing on the NASDAQ in late June of 2020, the share price has dramatically underperformed Bitcoin.

Performance of EBON (Indexed to 100) since NASDAQ Listing

Perhaps the Chinese crackdown on Bitcoin mining and cryptocurrency exchanges is weighing down investor appetite. Earlier this year, in April 2021, Ebang launched a cryptocurrency exchange platform – Ebonex. The timing couldn’t have been worse, as one month later, China banned institutions from offering cryptocurrency services to their clients.

Ebang followed up with investors by reassuring them that their mining business would be unimpacted as “we only considered overseas mining farms”. But Ebang also dismissed concern over its exchange platform, as it banned Chinese citizens from trading and believes most of their trading volume will come from overseas. However, accessing the platform from the United States leads to this message: “We are sorry that EBONEX no longer provides crypto trading in your country/region”.

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To make matters worse, a class-action lawsuit was filed against Ebang on April 15th, making allegations that the company directed IPO proceeds into a “series of opaque deals with insiders and questionable counterparties”. In addition, the lawsuit alleges Ebang failed to list on the Hong Kong Stock Exchange due to a “sales inflation scheme” and misrepresentation of the company’s claims on being a “leading bitcoin producer”.

Considering the adversity Ebang is facing, the lackluster performance is justified.