Jihan Wu is set to open his own crypto trading platform next month called, Matrix and rumors are swirling that this could allow a Chinese monopoly of crypto, potentially leading to adoption in the nation.
The former Bitmain founder and CEO has been rumored to be setting out on a new venture ever since it was revealed that he would be restructured from his head position at Bitmain.
Matrix, according to reports, will be a custody and trading firm. The company will also use its close links to Bitmain, one of the world’s largest crypto mining companies and owners of crypto.
Wu’s Turnaround in Fortunes
Prior to the Matrix move, Wu had been under mounting pressure following the various negative press and revelations that had come out about Bitmain. Many were wondering about the health of the company, especially following the failed IPO bid and reported losses of $500 million in Q3 2018.
Rumors of the failed IPO causing a rift between Wu and the other founder of Bitmain, Micree Zhan, were also touted as the reason for the lack of power he had at the company. Yet, Block sources have cast doubt on this, stating that the relationship was “great”.
Asia Crypto Today had reported previously that the reshuffle of Bitmain hierarchy was made official with new CEO, Wang Haichao, taking the helm. At the time many believed that Wu would be joining the Matrix project and now these rumors have been confirmed.
Matrix has been in the works for a while and was first dreamt up by Wu and others from Bitmain’s bitcoin cash project—Copernicus. And it is this close partnership with Bitmain that will, according to a source who spoke to CCN, make Matrix, “ the biggest OTC desk and asset-manager [in the world] overnight.”
This is because Bitmain has a huge wealth of reserves available to them and numerous crypto assets which they can use for the OTC. This partnership could lead to high liquidity and low prices for Matrix, setting them apart from the competition.
China’s government to allow Matrix to takeover?
The guaranteed success and potential monopoly of the industry have prompted CCN to speculate that the power that the company alongside Bitmain will hold could prove, “an alluring proposition for China”.
CCN has also claimed that there are rumors that Wu and his company Matrix have begun communicating with the Chinese government, who has banned cryptocurrencies in the nation as well as mining and other sectors of the industry.
Pointing to the trade war with the US and the fall in RMB price, CCN pointed out the benefits of a Matrix partnership with the government saying, “Matrix would provide an opportunity to exert oversight on crypto, without explicitly endorsing digital currencies.”
It is hard to speculate at this early stage, but if Chinese entrepreneurs and businessmen in the space, like Tron’s Justin Sun and Binance’s Changpeng Zhao, look for close ties with the government then perhaps their combined might well be undeniable.