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Digital currencies
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Chinese cryptocurrency exchanges seek reverse mergers in Hong Kong as IPO plans of bitcoin mining rig makers falter

  • Parent of OKCoin, the world’s No 2 exchange, recently acquired control of Hong Kong-listed Leap Holdings
  • That deal followed Huobi’s purchase of a majority stake in Pantronics

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Chinese cryptocurrency exchanges are seeking reverse mergers in Hong Kong, which allows them to acquire control of publicly traded firms in the city and bypass the lengthy initial public offering process. Photo: Agence France-Presse
Zheping Huang

The world’s biggest cryptocurrency exchanges are looking at reverse mergers in Hong Kong, as hopes dim for bitcoin mining rig makers’ plans to go public in the city.

The back-door listing efforts have come to light amid the reluctance of the Hong Kong stock exchange to approve the initial public offering (IPO) applications of companies involved in the underregulated cryptocurrency industry, according to people with knowledge of the matter.

Charles Li Xiaojia, chief executive of the Hong Kong Exchanges and Clearing, said on Wednesday that companies seeking to go public in the city should show consistency in their business models, in response to media questions about the status of the IPO applications from the world’s largest makers of cryptocurrency mining rigs – Bitmain Technologies, Canaan Creative and Ebang International Holdings.

Li, who spoke on the sidelines of the World Economic Forum in Davos, did not comment specifically on those three IPO applications, but clarified the Hong Kong stock exchange’s general principles for listings.

On the same day that Li made his comments, Hong Kong-listed construction engineering firm Leap Holdings Group disclosed that the company’s controlling shares are now held by OKC Holdings Corp, the parent company of OKCoin – the world’s No 2 cryptocurrency exchange by trading volume.
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