Bitmain’s IPO on Halt as Hong Kong Exchange Hesitant to Grant Approval

Looking at the crypto market crash with the shuttering of cryptocurrency mining firms, the Hong Kong exchange [HKEX] has shown reluctance towards granting approval for Bitmain’s Initial Public Offering [IPO]. The Hong Kong Stock Exchange (HKEX) is unwilling to approve the IPO, considering the volatility of the crypto industry.

While requesting anonymity, a person involved in the talks revealed that the exchange is very hesitant to approve these bitcoin mining companies due to the volatility in the industry. The exchange believes, “There’s a real risk that they could just not exist anymore in a year or two.” He added, “The HKEX doesn’t want to be the first exchange in the world to approve this and have one die on them.”

Reportedly, mining firms like Canaan Creative, Ebang and Bitmain applied to sell shares on the HKEX in May, June, and September of this year, respectively. But, the bearish trend in 2018 and the sharp ups and downs have made the exchange hesitant about listing these companies. Also, Canaan’s application lapsed in November after the firm couldn’t make it to the listing hearing six months from its May filing.

A spokesperson from HKEX responded that the exchange does not comment on individual companies or individual listing applications. With that, Bitmain also declined to comment on this.

While applying for IPO Bitmain also published their revenue figures to the Hong Kong exchange. Although, the exchange doesn’t seem to show green light following the bear market storm.

The anonymous source talked about the Bitmain revenue, “If there’s a significant drop in their revenue, profits or loss, they have to disclose that. It’s something that worries the exchange.”

The source also shared an opinion about HKEX stating, “What they are doing is they are just dragging the case right now. If the market continues going up, the exchange may be pressured to approve the cases because how well the entire industry is doing. But because the market is down, these companies really have to justify [how] this industry is sustainable.”

Moreover, due to considerable losses in the crypto mining industry and tighten regulatory scrutiny, Bitmain is facing a $5 million class-action lawsuit for alleged unauthorized mining.