the chief executive of the Hong Kong Exchanges and Clearing (HKEX), Charles Li Xiaojia, when speaking at the World Economic Forum in Davos, spoke regarding the importance of cryptocurrency related firms being more “consistent” with their business models when they would be looking to go public.
Li didn’t mention any names in specific, but it looks like he was taking a swipe at the recent Bitmain IPO application, amongst the other crypto mining giants that have recently applied to become public in Hong Kong.
Li was asked by the media in Davos in regards to his opinion on the status of IPO applications from a few of the world’s largest crypto mining rig firms. Bitmain Technology, Ebang International Holdings, and Canaan Creative have been the three major crypto mining rig companies that have filed to go public in the Asian financial epicenter. Now we can assume that Li had been talking about such mining giants.
The IPO applications of these three firms have been in jeopardy since about 80% of the market has been wiped off in the past year since digital assets have been struggling to recover.
Li went on to say that the lack of consistency in the crypto-related businesses when they would devise their business models is the reason behind the failure. Li told the media, at the World Economic Forum: “If a company has made billions of US dollars with the help of Business A, but suddenly it goes on to say that it would continue and do Business B but wouldn’t show any performance or if the Business B is better, then I don’t think that the Business A which was featured in their application would be sustainable. Apart from this, if regulators were hands off [on Business A] in the past but are ready to regulate it in the future, will the companies be able to continue the business and still make money from it?“
It looks like Li was suggesting the crypto mining rig firms such as Bitmain (that have been using a business model which has remained successful) to justify their future success with a completely different business model.
All the three crypto mining firms have been looking at penetrating into the AI industry, but their initial success has come from the crypto mining equipment, and Li allegedly believed that the applications have been inconsistent at its best.
At the end of December, reports suggested that the financial regulators in Hong Kong had been reluctant to provide back-ups to any crypto-related businesses at this point in time when the market is extremely volatile, and the future of regulatory frameworks have still been undecided.
It looks like Li has taken a dig at the Bitmain IPO, which hasn’t been a good sign for the crypto mining rig giants and their eventual plans of diversifying into Artificial Intelligence.