Chinese Bitcoin Mining Giant Canaan Launches IPO in Hong Kong Instead of US

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The second-largest Bitcoin miner of China, Canaan, is looking to raise $1 billion from their IPO launch in Hong Kong to close the deal instead of US according to a report by the South China Morning Post. If successful, the IPO would make the Bitcoin mining giant the first company from the blockchain industry to be listed on the Hong Kong bourse.

Since April, there have been rumors that Canaan Creative has been considering launching an IPO outside of China. Most have considered Hong Kong and the US as the top candidates for countries the company may launch in. According to unnamed sources, the company has settled on Hong Kong and is looking to reach the billion-dollar mark for its IPO.

Based in Hangzhou, the company founded in 2013 aimed to design and sell high-performance units specific to Bitcoin mining. Canaan had released unaudited figures in 2017 showing a net income of 410 Million Yuan or $64 million: a 600% increase over its profits in 2016.

Two attempts have been made by the company at raising funds through IPOs in its home country: the first attempt was in 2016, when the Canaan had tried to gain a listing in China’s A-share market through partnering with electric equipment manufacturer Luyitong which ended when regulators judged the deal to be overvalued; the second failed attempt was when the company applied for a listing in China’s “New Third Board” market in 2017 which required less stringent requirements for undisclosed reasons.

Majority of Canaan’s clients are still in China, amid the country’s crackdowns on initial coin offerings (ICOs) and cryptocurrency trading. China also remains as one of the top three nations for Bitcoin mining. Canaan’s decision to launch an IPO outside China may be indicative of its future plans of creating home appliances which passively mine cryptocurrency as well as the company’s desired expansion to create chips to mine altcoins.

Concerns over the decentralization of cryptocurrency mining arise as Canaan seeks to raise a billion dollars to expand its already huge mining interest and as another Bitcoin mining giant, Bitmain, begins a shift towards mining Ether to increase profits.

The increase in the popularity of Ethereum and its price has attracted mining conglomerates to switch from mining Bitcoin to Ethereum or to add new hardware to mine Ether as well. As Bitmain operates and builds mining rigs more powerful than the average GPU miner, there are worries that this may endanger the network’s decentralized nature.

These concerns grow as the possibility of the dominance of mining conglomerates pushing GPU miners out of the cryptomining space increases. As Digital Asset Research Analyst Lucas Nuzzi says, this scenario might just be a “nightmare for decentralization.”