Cryptocurrency mining giant Canaan has reportedly let its application for a Hong Kong IPO lapse. Sources close to the matter said that the IPO would not happen this year.

IPO Postponed

The second largest cryptocurrency mining equipment manufacturer Canaan Inc., has reportedly let its Hong Kong IPO application lapse, after having it filed earlier in May, Reuters reports, citing sources familiar to the matter.

The company had been targeting an IPO of at least $400 million – a figure which is down of as much as $2 billion earlier this year, people involved in the deal touted. The sources also revealed that regulators and the stock exchange had plenty of questions about the prospects and the company’s business model. They also said that the IPO is not going to happen in 2018 as there hasn’t been an update from the stock exchange regarding a listing hearing.

A senior equity capital markets banker, who is not involved in the matter, outlined:

With the bitcoin price dropping so much this year, there’s a lot of uncertainties over their business. If we cannot forecast their financials, how can we sell their IPOs?

Another application that’s currently in pending is the one of the world’s largest cryptocurrency mining company – Bitmain.

Hong Kong’s Regulatory Update

Canaan’s decision to let its application lapse comes a couple of weeks after Hong Kong’s Securities and Futures Commission issued a statement which set out bring cryptocurrency exchanges and portfolio managers under increased scrutiny.

Companies which distribute funds investing in the field will be required to be registered or to be regulated by the SFC. They would also have to comply with their regulatory requirements, which include suitability obligations.

Speaking on the matter was the Chief Executive Officer of the SFC Mr. Ashley Alder:

We hope to encourage the responsible use of new technologies and also provide investors with more choices and better outcomes.

What do you think of Canaan’s lapsed IPO application? Don’t hesitate to let us know in the comments below!

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