The Panama Papers – heard of them yet?
If you haven’t, these “Papers” are an astonishingly massive leak of legal documents from a tax haven law firm from within Panama.
The gargantuan trove was delivered anonymously to a South German newspaper in 2015, after which the International Consortium of Journalists (ICIJ) became involved in the pain-staking and time-consumer process of reviewing every document.
As you can imagine, the +11 million documents in the Panama Papers have already exposed the most intimate, even corrupt, financial moves of some of the world’s most powerful people, including Russian president Vladimir Putin and Chinese president Xi Jinping.
And it looks like the scope of the Panama Papers revelations have finally hit the cryptocurrency community, as it’s now been discovered that Chinese tech maestro Lei Jun had direct financial connections to Bitmain – the largest Bitcoin mining company in the world.
And while Lei Jun’s case doesn’t involve corruption in the same way other Panama Papers’ exposés have, it’s notable for other reasons. We’ll explain.
Who is Lei Jun?
The comparison may be tired by now in China, but for those in the West who aren’t familiar with Lei Jun, you can arguably best understand him as being analogous to Steve Jobs.
His Xiaomi brand of smartphones have taken the Chinese marketplace by storm recently, helping him accrue more than $7 billion USD in short order.
That dynamic alone has made Jun one of the richest men in the entire world.
And what’s this about Jun and the Panama Papers?
Apparently, Lei Jun’s a lot richer than any of us previously realized.
That’s because he has numerous financial connections to Bitmain – the titanic producer of Bitcoin mining hardware solutions that’s absolutely dominated the mining market in recent years.
These connections come in the form of “entities” controlled by Jun in a larger holding group called Beijing Changtong Wuxian Consulting Company.
Within this larger group are:
- BitMain Technologies Holding Company
- Lei Jun’s “Red Better Ltd” and “Colorful Mi Ltd”
- Wu Jihan’s (of Bitmain) “Wu Ji Han & Co Ltd”
- Micree Zhan’s (of Bitmain) “DivaIPTV Ltd” and “Bitmain Cowin Inc”
The proximity of these entities within the same holding group suggests Lei Jun’s making some type of profit off of Bitmain’s mining products.
Why does it matter?
Lei Jun’s connections to Bitmain are a hugely legitimizing force for Bitcoin and cryptocurrencies at a time when the Chinese government has been taking increasingly strict approaches to the space.
It’s akin to if Bill Gates of Microsoft or Mark Zuckerberg of Facebook were outed as secretly participating in Bitcoin mining companies. Lei Jun’s connections to Bitmain are a massive reputational boost to that end, then.
And Jun’s status as a rising star in China, combined with his incredible wealth and popularity, may make the Chinese government think twice about continuing to come down hard on the Bitcoin and cryptocurrency space.
Surely, the Chinese Communist Party won’t base their entire approach to crypto around Jun. But going forward they may hesitate to crackdown on Bitcoin mining knowing that one of China’s most important citizens is a major mining player.
Indeed, Jun is a successful man for good reason. If he’s betting on Bitcoin, maybe we all should be.
