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Bitmain forced to delay Hong Kong IPO amid crypto-mining decline

Chinese equipment maker joins peers in failing to win bourse approval

Bitmain equipment captured at a Bitcoin mining farm in Iceland.   © Reuters

HONG KONG -- Cryptocurrency mining equipment designer Bitmain Technologies has postponed its stock market listing after failing to gain approval from the Hong Kong bourse, highlighting the headwinds facing the virtual currency sector following last year's bitcoin crash.

The Beijing-based company controls roughly 70% of the global market for crypto-mining equipment. Bitmain filed last September for an initial public offering in Hong Kong, but the company said Tuesday that its six-month application period had expired without receiving approval.

"We will restart the listing application work at an appropriate time in the future," the company said on its website. As a unicorn, or an unlisted start-up valued at more than $1 billion, Bitmain has drawn intense interest from investors as it prepared for a stock market debut.

The Hong Kong exchange has not revealed details about its review process. Many suspect that the bourse questioned the stability and sustainability of the crypto-mining sector.

Crypto miners solve complex mathematical formulas to verify transactions and earn cryptocurrencies in the process. Bitmain is known for high-performance processors suited for high-speed computing. But the crash of bitcoin and other virtual currencies has squeezed the margins of currency-mining, denting demand for equipment as well.

"We do recognize that despite the huge potential of the cryptocurrency and blockchain industry, it remains a relatively young industry which is proving its value," Bitmain said. "We hope regulatory authorities, media and the general public can be more inclusive to this young industry."

Bitmain said it has taken steps for "rationalization and optimization," including job cuts and a leadership change. The company also has integrated chip design, hardware and software operations.

China's top three makers of crypto-mining equipment -- including Ebang International and Canaan -- filed for an IPO last year, but none has received approval. Ebang has filed again in Hong Kong, while Canaan is expected to pursue a listing elsewhere.

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