/Bimain IPO Status in Doubt as Hong Kong Calls Crypto Industry Immature

Bimain IPO Status in Doubt as Hong Kong Calls Crypto Industry Immature


bitmain bitcoin mining

Bitmain, the largest manufacturer of Bitcoin mining equipment, is experiencing something of a rough patch, as Hong Kong’s stock market overseers might be reluctant to approve the initial public offering (IPO) application of the company, given their stated concerns about the lack of a proper regulatory framework that can govern the cryptocurrency and blockchain industry.

Per a report from the South China Morning Post, the Hong Kong Exchanges and Clearing Limited (HKEX), might not give their blessings to Bitmain, as well as other DLT-based firms, to launch an IPO, arguing that the blockchain industry in the country is still “immature.”

According to public listing rules in Hong Kong, there would be a closed-door hearing meeting with the Listing Committee, which gives the final approval or rejection within six months of filing for an IPO. A listing can lapse if the applicant fails to hear from the Committee within the six months period.

Established by Micree Zhang and Jihan Wu back in 2013, the China-based Bitmain is said to be the biggest manufacturer of crypto-mining chips. According to the prospectus filed with HKEX, the manufacturer recorded over $2 billion in revenue and a profit of $1.22 billion during the crypto boom of 2017.

Earlier in the year, Bitmain was able to raise $400 million from a pre-IPO funding round that was led by Sequoia Capital as a part of the manufacturer’s objective to raise $1 billion before beginning efforts to secure its IPO. In September, the crypto mining manufacturer officially applied to go public in Hong Kong.

From the filing:

“According to Frost & Sullivan, we are the largest global ASIC-based cryptocurrency mining hardware company in terms of sales revenue in 2017, accounting for a market share of 74.5%. We offer a variety of mining hardware equipped with proprietary ASIC chips under our Antminer brand.”

Bitmain is estimated to have about a 67% share in the market for Bitcoin mining equipment, and the company generated about 60% of the industry’s computing power. Canaan Creative, another manufacturer of Bitcoin mining hardware, also filed an application in June to list shares in the Hong Kong market. However, the manufacturer’s $400 million IPO application lapsed in November.

If it does not fall through, Bitmain’s IPO would likely set a record for a cryptocurrency IPO. However, it would seem that, considering the volatile status of the crypto market and the lack of a robust regulatory framework, that may not happen anytime soon.

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