Hong
Kong-based BC Technology Group Ltd. is considering the sale of its cryptocurrency
platform, OSL, one of only two exchanges licensed under the city’s
digital-asset regulations introduced in June.
Anonymous
sources familiar with the matter have indicated that BC Technology has reached
out to potential buyers, including industry players and funds. The discussions
have set a tentative valuation of HK$1 billion ($128 million) for OSL.
Following
this news, BC Technology’s shares saw a significant decline of up to 16.7%
during early trading on Tuesday, marking the most substantial drop since June
12, as reported by Bloomberg News.
OSL’s
platform offers a range of services, including prime brokerage, exchange, and
custody for the cryptocurrency markets. It also provides infrastructure to
financial institutions, allowing them to facilitate virtual-asset trading.
Instead of a full sale, BC Technology may opt to sell specific parts of OSL,
according to insiders.
It’s
essential to note that these deliberations are ongoing. There is no guarantee
that they will culminate in a deal. In response to inquiries from Bloomberg News, a BC
Technology representative stated: “We are a highly transparent and
regulated company. We do not comment on market rumors and speculations.”
Hong Kong’s BC Technology Group is exploring the sale of its crypto platform OSL https://t.co/ho2Krmw1jv
— Bloomberg Crypto (@crypto) October 16, 2023
Modest Demand and Higher Costs
in Cryptocurrency Market
Hong
Kong introduced a comprehensive digital-asset regulatory framework on June 1,
designed to encourage the growth of the cryptocurrency sector and permit retail
investors to trade larger tokens on licensed exchanges.
However,
market demand for cryptocurrencies remains modest following the market’s
downturn and associated bankruptcies from the previous year. The city’s
stringent regulatory environment may also entail higher operational costs.
Moreover,
Hong Kong is struggling with the repercussions of the unlicensed JPEX exchange
debacle. It further tainted the reputation of the digital-asset industry.
BC
Technology reported a reduction in net losses, from HK$300 million in the same
period last year to HK$95 million for the six months ending in June, according
to its interim report.
OSL’s
digital assets and blockchain
platform business stand out as the primary income source for BC Technology, as
per the report. During the first half of 2023, digital-asset trading volume on
OSL dipped…
