On August 18, 2023, before market hours, Canaan issued a press release entitled “Canaan Inc. Provides Updates on Its Bitcoin Mining Operations”. The press release announced that “[t]o ensure legal compliance, the Company decided to temporarily shut down approximately 2.0 Exahash/s of its mining computing power in Kazakhstan since July 2023[.]” The press release further stated that “[t]he computing power shutdown consists of approximately 50% of the Company’s total installed computing power in Central Asia and North America, which totaled 4.0 Exahash/s at the end of the first quarter of 2023.”
Additionally, the press release announced that in connection with a failure to secure a settlement in mediation with a business partner “Canaan US intends to file an arbitration demand and proceed to arbitrate the parties’ dispute.”
Summarizing the issues, the press release stated that “[t]he challenges outlined above are anticipated to substantially affect the Company’s operational mining computing power starting in the third quarter of 2023.”
On this news, Canaan’s American Depositary Shares (“ADSs”) fell 12% to close at $2.06 per ADR on August 18, 2023.
