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OKCoin Founder Star Xu Seeks to Acquire Public Firm for $60 Million

Star Xu, the founder of cryptocurrency exchange OKCoin, may be seeking a possible backdoor IPO for his firm by buying a majority stake in a Hong Kong-listed company.

On Jan. 10, Xu (under his real name Xu Mingxing) filed with the Hong Kong Stock Exchange (HKEX) for approval to buy a 60 percent stake in a construction engineering firm called LEAP Holdings Group Ltd.

Through his company OKC Holdings Corp., Xu is aiming to purchase approximately 3.2 billion shares of the company for HK$0.15 (around $0.02) per share. In total, the acquisition, if approved, would cost more than $60 million.

To avoid the news affecting LEAP Holdings’ stock price, the firm is currently suspended on the HKEX.

While the effort has yet to be approved by the stock exchange, the successful purchase of the stake could provide a route for OKCoin to become a public company in Hong Kong via a back-door listing. That is, rather than go through the process of applying for an initial public listing (IPO) and jumping through all the necessary regulatory hoops, they would simply buy a firm already listed in Hong Kong.

Last August, crypto exchange Huobi took a similar step, becoming the largest shareholder of a HKEX-listed firm called Pantronics Holdings for around $70 million.

Other major firms in the crypto space, specifically mining companies Bitmain, Canaan and Ebang, have filed for IPOs in the same jurisdiction, but seem to be making little progress with the HKEX. Canaan has now let its application expire, while a HKEX insider told CoinDesk in December that the stock exchange was “hesitant” to approve the offering for Bitmain.

A Bloomberg report early this month suggested that Canaan is now seeking to IPO in New York, but nothing has been officially made public to date.

Wolfie Zhao contributed reporting.

HKEX image via Shutterstock

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Crypto Firms Merge to Build Software for Institutional Investors

Two crypto firms are merging in a bid to make crypto-asset management easier for institutional players.

CoinVantage, formerly a subsidiary of accounting firm MG Stover, is joining with Picks & Shovels, a provider of tools for crypto investors, to become a new entity known as Interchange. The new, eight-person company features software products that will initially service over 100 clients, including fund administrators, hedge funds and digital exchanges.

Front- and back-office systems for managing crypto assets are an unsexy, yet potentially lucrative corner of the blockchain industry as more financial institutions march into the space. That’s where Interchange says it will have a stronger software product relative to its competitors.

“We’ve been working very diligently, and now we have these partners that are going to catapult our knowledge and lend expertise that is very rare,” Picks & Shovels co-founder and CEO Matt Galligan told CoinDesk.

CoinVantage was a subsidiary of MG Stover up until Friday’s announced merger. MG Stover is an early entrant into cryptocurrency management, being among the first firms to provide services to digital asset funds as early as 2014. CoinVantage was launched as an MG Stover subsidiary in November 2017.

“The merger with Picks & Shovels is going to allow the firms to combine systems to create a superior product,” MG Stover founder and CEO Matt Stover told CoinDesk. “We’re really excited about Interchange being one of the leaders in the tech space for digital assets.”

Picks & Shovels was founded by Galligan, Dan Held and Clark Moody. While Galligan had previously launched tech startups in the media (Circa) and social (Socialthing) arenas, Held and Moody are longtime cryptocurrency veterans. Held, who recently penned a four-part series on the history of bitcoin for CoinDesk, co-founded ZeroBlock (which was acquired by Blockchain in 2013). Moody was the founder of RTBTC, which itself was acquired by ZeroBlock/Blockchain in 2014.

As for the momentum behind institutional crypto, Galligan says moves like Friday’s merger could represent a trend heading into 2019.

“I think there will be a general theme around making participation in this asset class easier for institutions,” he said. “Portfolio accounting and reporting is a necessary function no matter the state of the market.”

Galligan declined to share the financial terms of the deal. Stover will remain as CEO of MG Stover and join the board of directors of the new company. Interchange will become the software platform of choice for MG Stover, according to a company statement.

Galligan says Interchange – which is fully distributed but with offices in San Francisco, New York and Denver – is actively hiring for engineers.

Interchange image via Shutterstock

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Ethereum Studio ConsenSys Just Bought an Asteroid Mining Company

ConsenSys, the ethereum-focused venture studio, has just acquired Planetary Resources, a space venture hoping to mine asteroids.

Planetary Resources announced Wednesday that ConsenSys conducted an asset-purchase transaction, taking over the firm, with president and CEO Chris Lewicki and general counsel Brian Israel joining the ethereum-focused startup as a result. The terms of the deal were not disclosed.

The company, formed in 2012, was started in the goal of mining asteroids for resources.

To date, it has launched a pair of satellites into Earth orbit, including a successful test of a an infrared imager on its Arkyd-6 craft. However, the company has had financial difficulties after failing to secure a new round of funding this past June, according to Geekwire.

On Wednesday, ConsenSys founder Joe Lubin said he admired Planetary Resources due to its record and talent. The acquisition will now help ConsenSys conduct its space initiatives, he said, adding:

“Bringing deep space capabilities into the ConsenSys ecosystem reflects our belief in the potential for Ethereum to help humanity craft new societal rule systems through automated trust and guaranteed execution. And it reflects our belief in democratizing and decentralizing space endeavors to unite our species and unlock untapped human potential.”

In a statement, Lewicki said he was “proud of our team’s extraordinary accomplishments,” and thanked the company’s past supporters. Going forward, Planetary Resources will continue its work “to expand humanity’s economic sphere of influence into the solar system.”

“Over the course of nearly a decade, Planetary Resources has simultaneously pioneered technology, business, law and policy, and brought the promise of space resources irreversibly closer to humankind’s grasp,” he added.

Asteroid image via Shutterstock

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