Depending on current BC Technology discussions with potential buyers, the company might conclude a sale of all or parts of its OSL exchange.
BC Technology Group, the parent company and owner of Hong Kong crypto exchange OSL is looking to sell the exchange. According to a Bloomberg article referencing people familiar with the matter, BC hopes to complete the OSL sale at a HK$1 billion ($128 million) price tag.
Pleading anonymity, the people familiar with the matter said BC has started conversing with a few prospective buyers. However, they warned that there is no guarantee that the conversations will end in a deal.
BC Considers OSL Sale Despite the Exchange’s Position as Cash Cow
In addition to exchange services, OSL also offers custody services and prime brokerage. Furthermore, the company provides infrastructure to companies looking to launch crypto trading. Speaking on the possible sale, the people hinted that BC Technology may only sell parts of OSL and not the entire company.
A BC Technology interim report revealed that OSL is the company’s major income source. Generally, BC Technology’s net loss improved to HK$95 million in the six months ended June, from the more than HK$300 million recorded for the same period last year. However, the crypto trading volume on OSL nearly crashed 50% to HK$112.6 billion from the same period a year earlier.a
Since August, BC Technology’s valuation has nearly hit HK$1.9 billion, a more than 100% spike. Nonetheless, BC is mulling a sale of OSL. At the moment, neither BC Technology nor OSL has officially confirmed the sale or provided a reason. Bloomberg noted that in response to a query about the news, a BC Technology representative stated that the company does not “comment on market rumors and speculations.”
OSL and HashKey Exchange are the only platforms in Hong Kong legally permitted to offer crypto trading services. In August, OSL announced that it received a license uplift from the Securities and Futures Commission (SFC). The uplift allows OSL to immediately offer users crypto trading, starting with Bitcoin (BTC) and Ethereum (ETH).
HashKey launched crypto trading services in Hong Kong on August 28. The exchange got two licenses, the Type 1 and Type 7. These enabled the company to run a crypto trading platform and also offer users automated trading services. HashKey’s license also allowed it to onboard both retail and institutional investors.
HongKong Regulatory Environment
In June, Hong Kong introduced crypto trading guidelines for retail investors. According to SFC’s CEO Julia Leung, the new rules aim to “provide robust investor protection and manage key risks.” OSL’s Director and Head of Regulatory Affairs Gary Tiu praised the new rules. According to Tiu, the SFC’s guidelines are good enough for other markets to use.
Speaking on the rules, Tiu noted that the Hong Kong government has stipulated strict requirements it expects all service providers to follow. Although there are only two licensed companies in Hong Kong, Tiu noted that competition is good for the market. In an interview, the OSL exec said the company is always ready for more competition. He added that competition helps innovation and gives users more options.