The long drawn-out bear market has resulted in some apprehension among the big players in the cryptocurrency industry. One of the players is the Hong Kong Exchange (HKEX), which is reluctant to approve initial public offering (IPO) applications of Chinese bitcoin mining equipment manufacturers, Bitmain, a source told news portal CoinDesk.
A total of three companies had applied for IPOs in the duration of this year, namely, Canaan Creative, Ebang and Bitmain to sell the shares on the HKEX. While Canaan’s application lapsed after nearly six months of submitting it, in Bitmain’s case it is the apprehension of the stock exchange.
Earlier Crypto-News India had reported on Canaan‘s lapsed status. At the time, we had quoted a part of the guidelines laid down by the exchange stating, “if an applicant has delayed its proposed timetable and more than 6 months have elapsed since the date of its listing application form, the applicant will forfeit the initial listing fee. An applicant wishing to reactivate its listing application must submit a new listing application form accompanied by the initial listing fee. If there is a change in sponsor (including an addition or removal of a sponsor), the applicant must also submit a new listing application form accompanied by the initial listing fee.”
Speaking to CoinDesk, the anonymous source said, “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.”
While the parties involved in the IPOs did not comment, there were quite a lot of reactions on the same. Some lawyers who were familiar with HKEX’s IPO process told the news portal that the exchange’s hesitance was understandable.
Ivy Wong, a partner at the law firm of Baker McKenzie in Hong Kong, said that HKEX chiefly looks for “suitability and sustainability of the business and how risky the business is for retail investors”. She added, “I have seen cases where the applicants could satisfy the basic listing requirements for the three years’ track record, but did not manage to convince the HKEx that its business is sustainable, and the HKEX was reluctant to grant a listing approval.”
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