Bitcoin Miner Canaan’s IPO Likely Delayed After Hong Kong Filing Expires

Bitcoin Miner Canaan’s IPO Likely Delayed After Hong Kong Filing Expires

According to reports Bitcoin miner Canaan Creative’s application for the initial public offering (IPO) is delayed following the expiry of Hong Kong Filling. The report is based on an update issued on November 15 at the database of KHEX. The update states that the IPO application of Canaan has reached expiry date. It was due to last for six months from the date it was first submitted for regulatory approvals. Through the IPO, the company has plans to raise nearly $2 billion. However, a Reuters report states that the company has lowered its expectation from $2 billion to nearly $400 million.

An IPO issuer can always request for reactivity of the filling following the completion of the initial time period of the IPO, according to the guidance and listing rules provided by HKEX. The firm, however, will be required to refill the application in case it fails to reactive the application in three months from the date of expiration of the filling.

The executive director of Canaan Creative refused to comment on the subject matter. Moreover, the filing at the HKEX is currently inaccessible. The change in the status of the notification has come just after the Securities and Futures Commission (SFC) in Hong Kong introduced an entirely new regulation applicable to businesses with cryptocurrency under management.

A circular was issued by the SFC in the early November according to which the companies were required to invest nearly more than 10% of their gross portfolio in cryptocurrencies for registering with the regulatory bodies. The circular is applicable to all the investors regardless of whether the assets are considered as securities or not.

According to a Reuters report, the HKEX has questioned the business model of Canaan as the market of cryptocurrencies already versatile. The new IPO, in short, is not likely to go live in 2017 as there has not been any update on the upcoming hearing with the HKEX.

There are a number of Bitcoin mining firms in China that are planning to go public in Hong Kong including Ebang and the Beijing-based mining giant Bitmain which filed an IPO application in September 2018. Ebang on the other hand filed an IPO application with the Hong Kong Stock Exchange in June 2018. The deal was considered to be the largest of its kinds in the blockchain industry. Ebang being China’s largest crypto miner intends to raise $1 billion which it mulled to invest towards its growth strategy. However, it was not revealed as how much of the funds the company intended to raise through the IPO application.

Canaan had previously faced difficulties launching its IPO with the Chinese stock exchange. There are certain reports which claimed of the company looking at the US market as an alternative to the Chinese stock exchange. With the recent troubleshoot by the Hong Kong Stock Exchange; it is believed the crypto mining firm may shift its focus from the Chinese market to the US.