Talking at the World Economic Forum in Davos on Wednesday, the chief executive of the Hong Kong Exchanges and Clearing (HKEX), Charles Li Xiaojia, talked about how important it is for cryptocurrency related firms to be more “consistent” with their business models when looking to go public.
Although Li didn’t specifically mention any names, it seems he was taking a swipe at the recent Bitmain IPO application, among a few other crypto mining giants who have recently applied to go public in Hong Kong.
Li Comments on the Status of Crypto Mining Firm IPOs
Li was asked by the media in Davos about his opinion on the status of IPO applications from some of the world’s largest crypto mining rig firms. Bitmain Technology, Ebang International Holdings, and Canaan Creative are three major crypto mining rig companies who have filed to go public in the Asian financial epicenter. So we have to naturally assume Li was talking about these mining giants.
The IPO applications from these three firms are currently in jeopardy as 80% has been wiped off the crypto markets in the past year as digital assets are still struggling to recover.
Li went on to take a swipe at the lack of consistency of crypto-related businesses when devising their business models. Li told the media at the World Economic Forum that:
If a company made billions of US dollars through Business A, but suddenly said it will do Business B without showing any performance or said Business B is better, then I don’t think the Business A featured in their application will be sustainable.
Besides, if regulators were hands off [on Business A] in the past but will regulate it in the future, will you be able to continue the business and still make money from it?
Reading Between the Blurry Lines
Reading between the lines, Li was maybe suggesting that crypto mining rig firms such as Bitmain were using a business model that has been successful to justify the future success of a completely different business model.
All three crypto mining firms are looking to penetrate the AI industry, but as their initial success came from crypto mining equipment, Li allegedly believes the applications are inconsistent at best. If he is talking about Bitmain, Ebang and Canaan Creative of course.
CCN reported at the end of December that financial regulators in Hong Kong were reluctant to back any crypto-related businesses at this current time while the future of regulatory framework was still undecided.
It sounds like Li has taken a swipe at the Bitmain IPO, which is not a good sign for the crypto mining rig giants and their plans to diversify into Artificial Intelligence.