In the latest cryptocurrency news, China’s second biggest manufacturer of Bitcoin mining hardware called Canaan Creative is heavily considering listing in the United States. The plan came after shelving goals specifically meant for a Hong Kong initial public offering (IPO). This was according to sources familiar with the matter.
It is worth noting that the Beijing-based company was earlier planning to gather around US$1 billion. The goal, according to the official report, is to utilize the funds for the said IPO in Hong Kong. Now, it has already started discussing the possibility of selling shares in New York as soon as the first half of this year
What is even interesting is that all deliberations are at an early stage already. The only catch, however, is that it remains uncertain whether this will eventually lead to a transaction. The official report also mentioned that the sources did not want to be named, as the information given is private.
Canaan’s Hong Kong IPO application lapsed in November. Kong Jianping, who is the firm’s co-chairman, declined to comment. Bitcoin has declined 79 percent from its record high in December 2017, making it more difficult for digital currency companies to attract stock-market investors and less profitable for miners to generate new coins.
The Road To IPO Filing
Bitmain Technologies, the largest manufacturer of specialised mining chips for the industry, and smaller rival Ebang International also filed for Hong Kong IPOs last year. Founded in 2013, Canaan sells computer equipment under the “Avalon” brand with fast customised chips that win digital coins through solving complex maths problems. It reported 1.31 billion yuan (US$191 million) of revenue in 2017, according to a Hong Kong exchange filing in May.
Bitmain, in particular, is still in the process of answering questions from both the exchange and the Securities and Futures Commission (SFC). However, both Canaan and Bitmain declined to comment, while Ebang did not immediately respond to a request for comment.
Canaan’s lapsed application comes two weeks after Hong Kong’s SFC said it would bring “virtual assets” such as cryptos further within its regulatory net. The regulator said it would impose licensing conditions on firms which managed or intended to manage portfolios investing in virtual assets, irrespective of whether such assets constituted securities or futures, “in light of the significant risks virtual assets pose to investors.”
“Specifically because of the SFC’s announcement there will be quite a lot of changes in terms of the outlook of what they (cryptocurrency miners) can do,” said Stephen Chan, partner at law firm Dechert LLP.