Nano Labs, a cryptocurrency-mining chip designer based in Hangzhou, Zhejiang province, has filed for an initial public offering in the US to raise US$50 million. The application for American depositary shares comes amid a slew of regulatory risks in China and the US, leading to a drought in Chinese issuers’ overseas fundraising. Only two IPOs have been completed in New York so far this year, which raised a combined US$49.5 million, compared with 28 that raised US$5.8 billion in the year earlier period, according to Refinitiv. Still, Nano Labs is pushing ahead with a listing on Nasdaq, with a pitch to investors that it is evolving into a metaverse firm, providing computing power for gaming and entertainment, from a cryptocurrency-mining rig maker. “I am earnestly confident that the metaverse will open a new era for humankind,” chief executive and chairman Kong Jianping said in the draft prospectus filed last Friday. “It is my intention that Nano Labs will be committed to developing the power of the metaverse and [be] among the key players to help the world explore it.” The metaverse is a new frontier of the internet, which features an immersive, three dimensional online universe created by the convergence of physical, augmented and virtual reality. Nano Labs co-founders Kong and Sun Qifeng are the two largest single shareholders currently, with stakes of 32.8 per cent and 22.3 per cent, respectively. Kong was previously the co-chairman, and Sun a director, at competitor Canaan , the first cryptocurrency-mining rig maker to list in the US in November 2019. They left Canaan in August 2020 following a power struggle involving Canaan CEO Zhang Nangeng, Chinese media reported at the time. Nano Labs’ products and solutions are used to mine cryptocurrencies such as bitcoin, ethereum, and filecoin. In 2020, Nano Labs’ revenues were entirely generated from sales to customers in China. Last year, it set up a wholly-owned unit in Singapore to expand its sales overseas. China, which used to be the world’s largest cryptocurrency mining location, has recently seen some activities pushed underground after Beijing cracked down on the practice in May 2021. This saw the hash rate briefly sink to zero , a measure of the network’s processing power for verifying transactions and mining new cryptocurrency tokens, last July. The country still accounted for a fifth of bitcoin’s total hash rate from October to January, according to data released by the Cambridge Centre for Alternative Finance in May. The company noted the impact of the regulations in the draft prospectus: “We cannot assure you that government authorities in China will not introduce further enhanced regulation over the cryptocurrency industry that may lead to our inability to operate in China at all.” Even if the IPO succeeds, Nano Labs still faces the risk of a potential delisting. The Securities and Exchange Commission has mandated that mainland Chinese companies could get delisted from American markets as soon as 2023 if a US audit regulator fails to inspect their accounts in China for three consecutive years. Nano Labs said it faces such risks due to auditing work performed by its accounting firm’s offices in China. Nano Labs plans to use the IPO proceeds on research and development, including a computing network platform for the metaverse, setting up offices in the US and Singapore and expanding its global sales network. The company recorded net losses of 174.9 million yuan (US$26 million) and 37.7 million yuan in 2021 and 2020, respectively. Underwriters for the deal include AMTD, Maxim Group and Tiger Brokers.