Chinese Lottery Firm Furthers Crypto Pivot by Buying Bitcoin Miner Maker for $100M – CoinDesk



Chinese online lottery company (NYSE: WBAI) has acquired Bee Computing, a Hong Kong-registered maker of Bitcoin mining machines, for $100 million, according to an filing Monday with the U.S. Securities and Exchange Commission., which changed its name to BIT Mining Limited in March, has been quietly shifting its focus from its struggling online lottery business to bitcoin mining over the last four years. The company accelerated that transition late last year amid bitcoin’s historic bull run, making it one of many publicly traded companies trying to profit for bitcoin’s rising price. 

It is now one of the few large-scale companies in the crypto-mining business after acquiring the third-largest mining pool,, and three mining farms under its Loto Interactive unit. The company is venturing into the business of making mining machines with the latest deal, which comes at a time when mining companies are in short supply of those machines.

BIT Mining said Bee Computing has worked with MTK, which is the largest chip designer in Asia, to make a seven-nanometer chip for bitcoin mining. Taiwan Semiconductor Manufacturing Co. (TSMC) will supply the chips, according to Yufei Jiang, CEO of Bee Computing. 

Jiang said Bee Computing has received backing from some of the most influential companies in the semiconductor industry. MTK invested $9.5 million in a Series B round, and Taiwan-based ASE Group, which is the leading semiconductor assembly and test company, invested $3 million in the same round.   

Bee Computing’s current miner model’s performance is similar to Bitmain’s T17, which tends to have higher energy consumption than Bitmain’s S17 but is less powerful than Bitmain’s latest model S19. 

Jiang said Bee Computing’s research and development slowed down during the bear market a few years ago but the company can pick up the pace with new capital from BIT Mining. 

BIT Mining is set to invest $30 million in Bee Computing’s research to develop better 7-nm chips for bitcoin mining and higher quality miners for ether and litecoin. Jiang said the company would be able to test new chips by October. 

Crypto miners use the application-specific integrated circuit (ASIC), which is an integrated circuit chip, to mine cryptocurrencies such as bitcoin. The 7-nm figure refers to the size of the transistor. The smaller the component is, the more you can fit into a piece of silicon and the more powerful the mining machine becomes, making the chip one of the most sought-after components for any major bitcoin miner maker. 

To put that into context, leading crypto mining machine maker Bitmain’s latest model uses 7-nm chips. Designing stable and high-performance chips for mining machines is very costly and challenging even for some big players in the semiconductor industry, according to Jiang. 

While Bitmain is studying new models that use 5-nm chips, it may prove to be difficult to manufacture these because TSMC would make most of the chips for car makers or cellphone companies such as Apple. 

Bee Computing produces much less annually than Bitmain does, because of the fixed number of 7-nm chips TSMC allocates to each maker of mining equipement. In the near future, Bee Computing plans to provide all the new mining machines to BIT Mining until it has a surplus to sell. 

BIT Mining had disclosed that it purchased $8.5 million worth of mining machines in February from Bee Computing. 

According to the purchase agreement, BIT Mining will pay Bee Computing $35 million in stock by the end of the second quarter this year and send the other $65 million worth of stock after the acquired company manages to produce a certain number of 7nm ASIC bitcoin mining machines as well as make higher performance bitcoin, ethereum and litecoin mining machines. 

BIT Mining officially announced its strategic shift to bitcoin mining in December. In February, the company bought the crypto mining mining pool business,, from Bitdeer Technologies, which was majority owned by Bitmain’s former chief executive Jihan Wu. It has purchased at least $14 million in mining machines in an all-equity deal

Combined with the existing mining pool services provided by BIT Mining’s subsidiary Loto Interactive, the company would be one of the largest mining pools in the world, according to data from

Loto Interactive has three big data centers in the crypto mining hub Sichuan province in central China because of Sichuan’s rich hydropower in the summer. Loto Interactive previously only provided venues and maintenance services, rather than buying mining machines and profiting from mining cryptocurrencies. The company has started running its own miners early this year. 

If a company only operates a mining site for miners to make a profit, it does not have much exposure to crypto’s prices, It would face more price-related risks and could stand to profit more if it starts to buy mining machines and run them in its own mining sites. 

Tsinghua Unigroup is BIT Mining’s holding shareholder, but it remains unclear how the Chinese semiconductor conglomerate is involved in the company’s businesses.


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