Exclusive | Hong Kong regulators say IPOs by cryptocurrency businesses are premature, putting Bitmain’s US$3 billion fundraising plan in peril
- Bitmain’s application to raise up to US$3 billion in an initial public offering (IPO) lapses on March 26, 2019
- Hong Kong’s regulator and stock market operator have expressed their concern and reluctance to approve any fundraising plan by cryptocurrency-related businesses before proper rules are in place, sources say
Hong Kong’s stock market regulator and operator have signalled their reluctance to give their green light to an initial public offering (IPO) by the world’s largest assembler of cryptocurrency mining equipment, while a regulatory framework is still being drafted to ring-fence the disruptive technology.
It is premature for any cryptocurrency trading platform – or business associated with the industry – to raise funds through an IPO in Hong Kong before the proper regulatory framework is in place, according to two sources familiar with the matter, speaking to the South China Morning Post on condition of anonymity.
The reluctance by the regulator and market operator, which provide policy advice to the Listing Committee of the Hong Kong stock exchange (HKEX), could be an insurmountable hurdle in the US$3 billion IPO application by Bitmain Technologies, the world’s largest maker of cryptocurrency mining computers.
Hong Kong’s listing rules provide for a closed-door hearing before the Listing Committee, which gives the final approval or rejection within six months of an application, after all questions are answered. If the applicant fails to hear from the Listing Committee after the six-month period, the listing lapses.
A spokeswoman at the HKEX said the market operator could not speak about individual cases. China International Capital Corporation (CICC), the sponsor of Bitmain’s IPO, declined to comment. Bitmain’s spokesman declined to comment.