October 18, 2023
By Sharan Kaur Phillora
Hong Kong’s BC Technology Group Ltd. is deciding the sale of its cryptocurrency platform OSL, distinguished as one of the two exchanges granted a license under the city’s newly established digital-asset regulations introduced in June. According to a report by Bloomberg, the exploratory move comes amidst a challenging market environment for cryptocurrencies in the region.
Here’s what we know:
Insiders, choosing to remain anonymous, revealed that BC Technology has been evaluating interest from potential buyers, including industry stakeholders and investment funds. A tentative valuation of HK$1 billion ($128 million) has been speculated for the crypto exchange.
OSL operates as a comprehensive platform rendering prime brokerage, exchange, and custody services for cryptocurrency markets. It also extends infrastructural support to financial institutions aspiring to venture into virtual asset trading. While deliberations are ongoing, BC Technology might opt to sell segments of OSL as opposed to a complete sale, insiders hinted.
The move to sell comes in a complex market scenario.
Despite Hong Kong’s initiative to create a conducive environment for digital assets by introducing a regulatory framework on June 1, the appetite for cryptocurrencies remains subdued following a market downturn last year accompanied by several bankruptcies. The stringent regulatory setup is perceived to incur higher operational costs, potentially deterring crypto endeavors.
BC Technology’s financials indicate a narrowing net loss of HK$95 million in the first half of 2023 from over HK$300 million during the same period in the preceding year. The report attributes most of its income to OSL’s digital assets and blockchain platform business, despite a noticeable dip in digital-asset trading volume on OSL to HK$112.6 billion in the first six months of 2023.
In a related development, OSL has retracted its application for a digital asset license in Singapore, with plans for a revised submission. Concurrently, some of its Singapore clientele are being transitioned to the Hong Kong exchange, further consolidating its operational base in the city.
As BC Technology navigates these waters, the industry will be keenly observing how the prospective sale, if realized, could potentially recalibrate the crypto trading landscape in Hong Kong amidst regulatory challenges and market adversities.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.