Ebang International Holdings Inc. operates as a global blockchain technology and Fintech company.
The company has strong application-specific integrated circuit (ASIC) chip design capability. The company has become a global Bitcoin mining machine producer. Based on its deep understanding of the Fintech industry and compliance with laws and regulations in various jurisdictions, the company has launched professional, convenient, and innovative Fintech service platforms.
The company strives to di...
Ebang International Holdings Inc. operates as a global blockchain technology and Fintech company.
The company has strong application-specific integrated circuit (ASIC) chip design capability. The company has become a global Bitcoin mining machine producer. Based on its deep understanding of the Fintech industry and compliance with laws and regulations in various jurisdictions, the company has launched professional, convenient, and innovative Fintech service platforms.
The company strives to diversify its offerings and achieve a more stable financial performance by seeking cryptocurrency mining and farming businesses while further expanding into more Fintech businesses, and exploring future opportunities. As of December 31, 2023, the company had been operating a cryptocurrency exchange platform and a cross-border payment and foreign exchange platform.
The company intends to continue to concentrate its efforts in its blockchain and Fintech related businesses in 2024. The company established its wholly-owned subsidiaries in Canada, Australia, Singapore, Hong Kong, the Bahamas, New Zealand, and Malaysia to apply for Fintech business related licenses and wholly-owned subsidiaries in the United States in accelerating the construction of compliant mining farms in North America.
As of December 31, 2023, the company has received the Money Services Business (MSB) License from the Financial Transactions and Reports Analysis Centre of Canada, which allows it to engage in foreign exchange dealing, money transferring and dealing in virtual currencies in Canada; registration approval from Australian Transaction Reports and Analysis Centre (AUSTRAC) as digital currency exchange provider, which allows it to provide cryptocurrency exchange services in Australia; acquired a company with an Australian Financial Services License (AFSL) for engaging in financial services in Australia; registration approval as an independent remittance dealer on the AUSTRAC Remittance Sector Register, which allows it to provide remittance services in Australia; the Trust or Company Service Provider (TCSP) license and registration approval as a Trust Company from the Company Registry in Hong Kong, which allows it to carry on a trust or company service business; the Money Service Operator (MSO) license from the Customs and Excise Department in Hong Kong, which allows it to operate money changing and remittance services; the Type 4 and 9 licenses from the Securities and Futures Commission in Hong Kong, which allows it to carry on advising on securities and asset management service; registered as a Digital Asset Business and a Firm Dealing in Securities as Agent or Principal, Arranging Deals, Managing Securities and Advising on Securities from the Securities Commission of the Bahamas, which allows it to carry on digital asset business activities and securities activities in and from the Commonwealth of the Bahamas.
As of December 31, 2023, the company has been operating a self-developed proprietary cryptocurrency exchange platform, Ebonex, and a self-developed proprietary cross-border payment and foreign exchange platform, EbonFX, targeting qualified investors subject to compliance with applicable laws in the jurisdictions in which EbonFX operates. The company is also in the process of obtaining additional and/or relevant licenses and approvals for its subsidiaries in Singapore, Hong Kong, Australia, New Zealand, and Malaysia. If and once obtained, the licenses will allow it to operate additional Fintech businesses in such countries and regions. Meanwhile, the company focuses on application development, regulatory compliance, and talent recruitment to ramp up execution of its new business plans for the expansion in these countries.
Value Proposition
The company designs fabless integrated circuits (ICs) in the front-end and back-end, which are the major components of the IC product development chain. The company dedicates its technology and expertise in IC design for its blockchain products business and telecommunication products business.
The company independently designs and develops its blockchain and telecommunications products in-house, including the design of proprietary ASIC chips for its cryptocurrency mining machines. Front-end IC design and back-end IC design are the key parts of the IC design process. The company determines the parameters of the IC chip, establishes the basic logic of the design, maps out the initial plan for the physical layout, and conducts back-end verification on the design. The company’s strong design capability has ensured that it has achieved a 100% tape-out success rate to date. The company then closely partners with industry-leading third-party suppliers to fabricate, test, and package the IC products it designs. Leveraging its long-established experience and know-how in producing telecommunications products, the company has also established in-house production capabilities to conduct PCB assembly and system assembly for both mining machines and a wide range of telecommunications products.
For the cryptocurrency exchange business, the company’s retail customers are able to access a world class trading platform with low trading fees, along with a safe environment that ensures their digital assets are held securely. On this basis, the company’s institutional clients through its over-the-counter (OTC) desk are able to get personalized customer experience, as well as immediate settlement into fiat or cryptocurrency, along with class-leading trading spreads.
As for the cross-border payment and foreign exchange business, clients can access competitive foreign exchange rates, fees, and services in the market through the EbonFX platform. Additionally, the company’s dedicated service team, comprising foreign exchange (FX) market specialists and experienced professionals, offers tailored solutions to mitigate FX risks for its corporate customers and help protect their costs. Using the platform, the company’s customers have the ability to access its cross-border payment services across multiple currencies. Some of the key benefits of using EbonFX for cross-border payment include its simplicity and intuitiveness, its 24/7 availability, access to competitive FX rates in real-time, access to support from professionals, as well as FX risk management for its corporate clients. The company’s approach to international payments is centered around providing its customers with reliable, convenient, and cost-effective ways to transact online. The company strives to make international payments simple and easy for its customers, offering personalized service and tailored solutions to meet the unique needs of each customer. The company’s customers typically are charged high margins and fees by their banks for their foreign currency transactions, hence the company’s value proposition is to provide a better, more cost-effective payment solution for businesses and individuals operating across borders.
Blockchain Products Business
The company's blockchain products business primarily consists of Bitcoin mining machine sales.
Bitcoin Mining Machine Products
The company's technology and expertise in ASIC applications is primarily dedicated to its blockchain products business, which predominantly consists of the design, development, production, and sales of its proprietary ASIC-based Bitcoin mining machines under the Ebit brand. The company's Ebit Bitcoin mining machines feature its proprietary ASICs, and the ASICs are integrated with components procured by it.
Since the beginning of its ASIC designing business, the company has successfully and independently completed the design of 14nm, 12nm, 10nm, 8nm, 7nm, and 6nm ASIC chips. Its existing ASIC chips are targeted at solving Bitcoin's cryptographic algorithms incorporating the latest technology. Since the launch of its first mining machine with 10nm ASIC chips in 2017, the company has introduced mining machines with second generation 10nm ASIC chips in 2019 and mining machines with 8nm ASIC chips in 2020; and it has successfully and independently completed the design of 6nm ASIC chips and the design of a chip for simultaneous Litecoin and Dogecoin mining in 2021. The company focuses on developing its proprietary 5nm-optimized ASIC chips and optimized mining machines for non-Bitcoin cryptocurrencies, such as Litecoin.
The company has also designed its hardware architecture to optimize the computing power of its ASIC chips while efficiently consuming energy. This includes incorporating heat dissipation technology, such as high-grade aluminum cases and customized heat sinks and fans. All of the company's mining machine products incorporate built-in controllers so they can operate as standalone devices. Its products utilize automatic cluster management software system for intelligent tracking and monitoring of the operation status of the device, which provides convenience for large-scale set-ups with multiple devices. The company's products are also configured to allow for simplified software and internet connection setup, thereby reducing installation, and configuration time.
The company continuously introduces new series of Bitcoin mining machines incorporating the latest development of ASIC design and process technology. The company also produces and sells Bitcoin mining machine accessories and offers ancillary service to its customers to assist their operations.
Fintech Businesses
The company's Fintech businesses primarily composed of cryptocurrency exchange and cross-border payment and foreign exchange.
Cryptocurrency Exchange Business
In Australia, the company has a self-developed cryptocurrency exchange platform operating under the name Ebonex, enabling users to buy, sell, or convert digital assets, which is targeted towards individual retail users and institutional customers. Ebonex is registered and enrolled as a digital currency exchange provider with the AUSTRAC to provide such services via the platform. The company has integrated robust anti-money laundering and counter-terrorism financing (AML/CTF), KYC, Know Your Transaction (KYT) measures, and utilizes industry benchmark third-party asset custody services in Ebonex to ensure that user assets are secure and meets relevant regulatory and compliance requirements.
The company’s cryptocurrency exchange business is in the early stages of operation and has only had a short history.
Cross-Border Payment and Foreign Exchange Business
In March 2022, the company established its cross-border payment and foreign exchange business in Australia, aimed at small to medium business enterprises (SMEs) and high net-worth individual clients, through acquiring an established specialist cross-border payment company that has been in operations for over 10 years in Australia. The strategic acquisition provides immediate scale, capability, and expertise to facilitate the company’s entry into the global financial markets. Together with its strong internal technological capabilities, the company has successfully launched its self-developed proprietary cross-border payment and foreign exchange platform, EbonFX. The cross-border payment and foreign exchange business offers a comprehensive range of cost-effective payment and risk management solutions to businesses looking to manage their currency exposure and streamline their international payments, while satisfying relevant AML/CTF, KYC, and KYT regulatory requirements. Backed by its network of established partnerships with banks and regulated financial institutions globally, EbonFX is an ASIC licensed and AUSTRAC regulated business that enables its customers to transact safely and securely with confidence in multiple currencies and 180 countries across the world.
In essence, EbonFX provides customer-centric foreign exchange, risk management, and cross-border payment services. The company's range of solutions includes (but is not limited to) the following:
Spot Payments: A spot transaction is an FX transaction where the value date is two business days after the trade date, or T+2. The spot solution of the EbonFX platform allows the company’s customers to exchange currencies for payments, or hold for future needs.
Ability to Hold Multiple Foreign Currencies: The company’s multi-currency balance capability enables its customers to hold and manage multiple currencies in a single account, making it easier for them to receive, send, and manage their global currency needs and reducing the need for multiple bank accounts.
Manage Foreign Currency Risks: The company helps managing foreign exchange risks for its wholesale customers through a range of tailored hedging strategies (e.g., forwards and options) to help them manage their foreign currency exposures.
Forwards: Forward exchange contracts provide a way for the company’s wholesale customers to lock in a rate for a period of up to twelve months, in order to hedge against future currency fluctuations. A foreign exchange forward contract is a derivative product where the value date is more than two business days after the trade date.
Options: EbonFX offers wholesale clients foreign exchange option contracts in foreign exchange. These options products are a type of derivatives product which gives the buyer of the contract the right (but not the obligation) to buy or sell a currency at a pre-agreed exchange rate on a predetermined date in the future.
Telecommunications Business
The company entered the telecommunications business in 2010. The company's communications network devices mainly focus on the access layer, which is the entry point for providing access to the telecommunications network for end users. Its products are broadly grouped under the following product lines, as well as related parts and accessories:
Fiber-Optic Communication Access Devices. The company's fiber-optic communication access devices are mainly used in telecommunication rooms and data center rooms. The company collaborates with operators to provide professional and reliable fiber-optic private network communication services to enterprise clients and data center customers to meet the growing demand for high-density fiber optic interconnection communication networks in urban areas. The main products the company offers under its fiber-optic communication access devices product line include multiprotocol label switching (MPLS) fiber-optic access network devices, multi-service access platform (MSAP) integrated business access devices, and wavelength-division multiplexing (WDM/DCI) fiber-optic devices.
Enterprise Convergent Communication Terminals. The company's enterprise convergent communication products are mainly used on the enterprise client-side. The company collaborate with operators to provide one-stop fiber optic broadband access services to enterprise clients to meet the growing demand of enterprises for internet access and cloud-based office needs. The main products that the company offer under its enterprise convergent terminal product line include gigabit passive optical network (GPON), Fiber to the Room (FTTR), passive optical network converged gateway, enterprise cloud gateway devices, Industrial Internet of Things (IoT) access devices, and business enterprise smart wireless access devices.
Customers
Blockchain Products Business
The company's customer base for sales of its Ebit mining machines is consisted of both enterprises and individual buyers. Sales are typically made on one-off sales contract or purchase order bases. Generally, the company either requires prepayment in full or offer alternate payment plans for customers to prepay a certain percentage with the remainder to be settled after delivery of the products and it has extended credit sales to certain customers since 2018. Substantially all of the customers of its mining machine hosting services before it halted such services in the PRC were customers who have purchased its mining machines.
Cryptocurrency Exchange Business
The company's target customers mainly trade with its digitally on the platform, as well as through its OTC execution and treasury services with the assistance of its experienced digital assets experts. Users can rely on a secure and easy-to-use platform, allowing seamless deposits and withdrawals from either fiat or cryptocurrency wallets, and a robust trading experience on Ebonex.
Cross-Border Payment and Foreign Exchange Business
Tapping into the existing client base of its acquired Australian cross-border payment and foreign exchange business and aiming to expand beyond the existing client pool, the company is mainly targeting retailers, wholesalers, small businesses, importers, and exporters. With its global business network, the company is continuously looking to serve customers in Australia and beyond. The company’s strategy is to retain and nurture the existing client base, while at the same time aiming to acquire new customers in the SME segment in a variety of industries including (but not limited to) retailers, wholesalers, manufacturers, as well as importers and exporters, which have a business requirement for cross-border payment and foreign exchange services. In addition, the company provides its services to high net-worth individuals that have demands for overseas payments and income.
Telecommunications Business
The company's telecommunications products are mainly sold in China under the brand name 'EBANG' through direct sales. Its customer base for its telecommunications products primarily includes major telecommunications service providers in China.
Sales to the company's enterprises customers are generally made on one-off sales contract or purchase order bases with a credit period of one to nine months. The company generally enters into framework agreement with the major telecommunications service providers in China with a credit period up to one year. It typically requires payments to be made in installments upon delivery of the products. The company encourages its sales representatives to negotiate shorter credit periods to reduce its credit risk.
After-Sales Services
The company provides installation services of communication network devices to its customers depending upon the products purchased and the type of customer. Its mining machines are configured by the end-users using its instruction manual.
Sales and Marketing
Historically, the marketing of the company’s blockchain and Fintech products was done through word of mouth, press releases of its product launches, and exhibitions when it launches a new product. Certain of the company’s available products are also advertised on its website which is updated periodically. From time to time, the company maintains a presence on social media in order to raise awareness of its brand.
For its telecommunications products, the company obtains supplier contracts through bidding processes held by the major telecommunications service providers in China, in order to become an approved supplier. The company sets up sales offices in the provinces with large distribution scale according to the winning bids. Its sales offices also serve the surrounding provinces to form an effective sales network.
Intellectual Property
As of December 31, 2023, the company had registered 67 patents, 10 IC layout designs and 68 software copyrights, with an additional 42 patent applications in the PRC and overseas pending.
On November 27, 2020, the company obtained an exclusive license of a key patent in the Bitcoin mining industry, which license granted it with the exclusive right to use the patent in South Korea and export the product from South Korea to other countries. On January 1, 2022, the company obtained another license, which granted it with the right to use the patent in the United States and export the product from the United States to other countries. The core of this patent is AsicBoost, a method that can increase performance of Bitcoin mining by about 20%.
Research and Development
The company's research and development expenses were U.S.$7.4 million in 2023.
Environmental Matters
The company has received GB/T24001-2016/ISO 14001:2015 environmental management system certification, which is valid until September 11, 2024, and subject to renewal.
Regulation
The company holds an Australian Financial Services License (AFSL) that authorizes it to deal in and provide general financial product advice in relation to among others, foreign exchange contracts (e.g. FX Forward and Options Contracts), and non-cash payment products (NCP).
Two of the company’s business entities in Australia has been registered as Digital Currency Exchange Providers with AUSTRAC and comply with the regulatory obligations imposed by AUSTRAC under the AML/CTF Act, including having an AML/CTF Program; identifying the types of money laundering and terrorist financing risks that may be faced by the business and the consequences of non-compliance; reporting on suspicious matters; and keeping records for the prescribed period.
The company's business activities are subject to various restrictions under the U.S. export and similar laws and regulations, as well as various economic and trade sanctions administered by Office of Foreign Assets Control.
History
Ebang International Holdings Inc. was founded in 2010. The company was incorporated in 2018 as an exempted company with limited liability in the Cayman Islands.
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