Due to the extremely high volatility and bearish market trends, the HKEX is reluctant to list crypto companies and doesn’t want to approve Bitmain’s IPO.
The current situation in the crypto market doesn’t seem to be very optimistic. Numerous companies feel the pressure of the bear market and need to take some measures. One of the examples of such companies is Chinese crypto miner Bitmain.
Last week Coinspeaker reported about the company’s decision to shut down its Israeli Development Center. Though the center used to rank among the largest companies in the whole blockchain industry, the prolonged bear market had enforced the company to take such a decision.
But it was not the end of bad news for Bitmain.
Failed IPO Plans
As it has become recently revealed, due to the extremely high crypto market volatility, the Hong Kong Stock Exchange (HKEX) is reluctant to approve Bitmain’s IPO.
In September, Bitmain joined the row of two other mining giants, Canaan Creative and Ebang, that had filed their applications to sell their shares on the HKEX. At the time of applying for holding its IPO, Bitmain was planning to focus on new mining hardware and expanding its geography via the acquisition of new lands for placing crypto mining farms there already in Q1 2019.
But the ongoing year has turned out to be rather unpredictable for the crypto industry. That’s why the HKEX isn’t willing to list crypto companies.
The report cites a person who preferred to stay unnamed due to the nature of the information revealed:
“The exchange is very hesitant to actually approve these bitcoin mining companies because the industry is so volatile. There’s a real risk that they could just not exist anymore in a year or two. The HKEX doesn’t want to be the first exchange in the world to approve this and have one die on them.”
Nevertheless, there are no any official comments neither from the side of the exchange nor from the side of Bitmain.
IPO in Hong Kong
Though Bitmain wasn’t the first crypto company to file its application to go public, it had all chances to be the first one to succeed. According to the local rules, after an applicant files a draft prospectus with the HKEX, the application should be approved by the HKEX and the Securities and Futures Commission.
After that, a listing hearing should be held. Only following this procedure the company may go public. Nevertheless, there is only a six-month time limit to pass all the steps, otherwise, the application will be considered to be inactive.
As Canaan filed its application in May, its application has already lapsed and only two weeks are left for Ebang. But there are no evidence for success right now.
Nevertheless, Bitmain still has some chances to convince the exchange, though it doesn’t look like to be very easy. First of all, the HKEX should see that the market will get over the current downturn. And secondly, Bitmain should convince the stock exchange that it itself is a strong company that will survive despite all market conditions.