Bitmain, the largest manufacturer of Bitcoin mining equipment, is experiencing something of a rough patch, as Hong Kong’s stock market overseers might be reluctant to approve the initial public offering (IPO) application of the company, given their stated concerns about the lack of a proper regulatory framework that can govern the cryptocurrency and blockchain industry.

Per a report from the South China Morning Post, the Hong Kong Exchanges and Clearing Limited (HKEX), might not give their blessings to Bitmain, as well as other DLT-based firms, to launch an IPO, arguing that the blockchain industry in the country is still “immature.”

According to public listing rules in Hong Kong, there would be a closed-door hearing meeting with the Listing Committee, which gives the final approval or rejection within six months of filing for an IPO. A listing can lapse if the applicant fails to hear from the Committee within the six months period.

Established by Micree Zhang and Jihan Wu back in 2013, the China-based Bitmain is said to be the biggest manufacturer of crypto-mining chips. According to the prospectus filed with HKEX, the manufacturer recorded over $2 billion in revenue and a profit of $1.22 billion during the crypto boom of 2017.

Earlier in the year, Bitmain was able to raise $400 million from a pre-IPO funding round that was led by Sequoia Capital as a part of the manufacturer’s objective to raise $1 billion before beginning efforts to secure its IPO. In September, the crypto mining manufacturer officially applied to go public in Hong Kong.

From the filing:

“According to Frost & Sullivan, we are the largest global ASIC-based cryptocurrency mining hardware company in terms of sales revenue in 2017, accounting for a market share of 74.5%. We offer a variety of mining hardware equipped with proprietary ASIC chips under our Antminer brand.”

Bitmain is estimated to have about a 67% share in the market for Bitcoin mining equipment, and the company generated about 60% of the industry’s computing power. Canaan Creative, another manufacturer of Bitcoin mining hardware, also filed an application in June to list shares in the Hong Kong market. However, the manufacturer’s $400 million IPO application lapsed in November.

If it does not fall through, Bitmain’s IPO would likely set a record for a cryptocurrency IPO. However, it would seem that, considering the volatile status of the crypto market and the lack of a robust regulatory framework, that may not happen anytime soon.

Featured Image from Shutterstock

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