The largest Bitcoin mining equipment manufacturer in the world, Bitmain, is seeing opposition of its IPO by the Hong Kong Exchanges and Clearing Limited (HKEX), which says the industry is still “immature”.
HKEX argues that the blockchain industry still lacks oversight and no proper regulations or laws that can ensure proper governess of blockchain and cryptocurrency sphere.
Bitmain, a 2013 company founded by Jihan Wu and Micree Zhang, is the largest manufacturer of crypto mining computer chips. The company said in its filing that in 2017, it had generated USD 2 billion in revenue and a profit of USD 1.22 billion. This was largely due to the skyrocketing values of cryptocurrency:
“According to Frost & Sullivan, we are the largest global ASIC-based cryptocurrency mining hardware company in terms of sales revenue in 2017, accounting for a market share of 74.5%. We offer a variety of mining hardware equipped with proprietary ASIC chips under our Antminer brand.”
Bitmain has been seeking ways of expanding the company. Earlier in 2018, the company secured USD 400 million in private pre-IPO round. The initial round was led by the VC Sequoia Capital. Bitmain’s aim was to collect USD 1 million prior to its main IPO.
The company filed for the IPO approval in September. HKEX rules state that an approval requires a private hearing with the Listing Committee, which then decides to accept or reject the IPO application in the next six months. Bitmain still has three more months to hear a final decision.
If the regulators give Bitmain the approval, it will be the biggest IPO in the industry. However, given that the HKEX officials are not comfortable with the unregulated industry, that now seems to be a slim chance.
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