Hong Kong financial regulators are reluctant to back any crypto-related business at this moment in time while proper rules are being drafted to regulate initial public offerings (IPOs). The news might have a serious knock-on effect on the application of the Bitmain IPO and other related crypto projects in Hong Kong in the near future.
Hong Kong was until recently one of the most crypto-friendly destinations in Asia, but as regulatory bodies turn the screw across the continent, Hong Kong crypto businesses are now in limbo.
Bitmain IPO Not Approved by Regulators
The South China Morning Post has reported that Hong Kong stock market regulators are dragging their feet in approving an IPO by the planet’s largest assembler of crypto mining equipment company, Bitmain. The regulators are adamant on waiting for the proper framework to be implemented in regards to crypto-related businesses in Hong Kong, before approving any companies or IPOs, which includes the Bitmain IPO.
Sources close to the Hong Kong regulators anonymously told the South China Morning Post:
It is premature for any cryptocurrency trading platform – or business associated with the industry – to raise funds through an IPO in Hong Kong before the proper regulatory framework is in place.
Bitmain Technologies applied to the Hong Kong regulators, who advise the Listing Committee of the Hong Kong Stock Exchange (HKEX), to create a US$3 billion IPO, but it seems the Bitmain IPO is now in serious jeopardy.
The Bitmain IPO could now be bogged down in red tape for a while as the Hong Kong regulators’ ruling could take six months to unfold, and still end in rejection for the crypto mining giants.
Bad News for Bitmain
Asian destinations such as Singapore and Hong Kong were once a haven for crypto-related businesses, but as central banks and other regulatory powerhouses attempt to bog down the industry with a stricter framework, it could be one hurdle too many for the Bitmain IPO.
Bitmain was founded back in 2013 and has become the largest assembler of crypto mining equipment in the world over the past few years.
The Bitmain IPO could simply be the product of poor timing. Their application comes amidst a time of change for the Hong Kong crypto sector as new rules are currently being drafted to regulate the IPO market. However, as Bitmain makes over 90% of its profits from assembling crypto mining equipment, waiting for the approval of their IPO is not the end of the world for the company.