OKCoin founder Star Xu is reportedly attempting to securing a 60 percent stake in construction engineering firm LEAP Holdings Group, a move that many see as a path towards OKCoin holding an IPO. The news was originally reported by CoinDesk on January 17.
Founded in 2013, OKCoin is a Shanghai-based cryptocurrency exchange. According to data from Coinmarketcap, the exchange is currently the world’s 89th-largest in terms of trade volume.
A Majority Holding in LEAP Could Act As a Gateway to an IPO
Xu submitted a request to the Hong Kong Stock Exchange (HKEX) to purchase approximately 3.2 billion shares of the company for the equivalent of roughly USD$0.02 apiece, totaling over USD$60 million.
HKEX has not yet approved the request, but if it does, OKCoin would reportedly have an easy pathway into becoming a publicly-listed company in China–instead of having to overcome the legal and bureaucratic challenges associated with going public in China, it would simply use the firm that it holds a majority stake in to act as a sort of ‘surrogate’ to hold its own IPO.
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A similar set of actions was taken by cryptocurrency exchange Huobi in August of 2018 when the company purchased a majority stake in Pantronics Holdings for $70 million.
Starting the New Year with our Crypto News Roundup. There is a lot to be excited about as 2019 gets going!https://t.co/KeLFxclsZB
— OKCoin (@OKCoin) January 5, 2019
HKEX is Slow to Approve Crypto-Related Applications
A number of other cryptocurrency industry firms are seeking to hold IPOs of their own in an apparent attempt to gain capital from the traditional financial sphere. So far, the list includes crypto mining equipment manufacturers Ebang and Canaan, and crypto mining giant Bitmain, who have all filed applications to hold IPOs within the same jurisdiction.
According to CoinDesk, HKEX has been reluctant to approve any of the IPO applications. So much time has passed that Canaan’s application has already expired, but Bloomberg reported earlier this month that the company now may be pursuing an IPO in New York.