Hong Kong Exchanges and Clearing (HKEX) delays approval of the IPO applications submitted by the leading crypto players in view of the bad market environment.
The news reports read that HKEX has received applications from such mining hardware producers as Cannan Creative, Ebang and Bitmain.
According to the sources, the exchange definitely makes no rush to green light IPO from crypto mining sector citing the market volatility that is observed now. This position is said to be related to the fact that crypto mining seems to the risk segment as mining companies can shut down business in a year or two. In this context, no one wants to become the first to approve the company that will disappear afterwards, and HKEX is not an exception.
The guidelines cover that IPO applications must get a positive determination of HKEX and Securities and Futures Commission, and then the company can pass listing hearing to determine nominal stock price and amount of the offer. Notably, the application becomes invalid if the company fails to attend the hearing after six months from the date of submission. In that case, the application can be renewed within three months after that.
Specifically, application of Canaan Creative became inactive in November, while Ebang and Bitmain have two weeks and three months until HKEX freeze their applications respectively.
Another source shared the view saying that these companies are unlikely to face hearing unless the regulators meet them halfway. Along with other items, the financial reports and crypto reserves of the companies play an important role for HKEX. Specifically, it is said to check whether IPO applicants regularly unveil their loss reports.
At the same time, it is also quite possible that HKEX postpones approvals being uncertain, as the market sources mentioned.