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Rebuffed: Bitcoin Group chief executive Sam Lee, flanked by associates Jim Chen (left) and Allan Guo (right). Photo: Paul Jeffers
Bitcoin Group has pulled its float after the Australian Securities Exchange said the Bitcoin miner would have to make a fresh suggest to investors because it is not persuaded the company has enough specie to get through its very first year on the market.
But the Bitcoin miner said it will consider a fresh IPO after the so called “Bitcoin halving” due ter the middle of this year, which is expected to have a dramatic effect on the Bitcoin price.
The company said on Wednesday it is withdrawing its IPO and will come back the $Five.9 million it raised to investors, blaming the corporate regulator for not permitting forecasts on the very volatile Bitcoin price to be used te an assessment of Bitcoin Group’s working capital.
“The key reason for the withdrawal of the opoffering is due to the requirement of the ASX, that Bitcoin Group procure a working capital report from an independent accounting rigid, a report not specifically required for a listing on the ASX,” the bitcoin miner said te a statement.
“Ter preparing the working capital report Grant Thornton, the independent registeraccountant, wasgoed required to factor te the reduction of freshly minted bitcoins released on the occurrence of block halving ter July 2016, without regard to the expected increase ter bitcoin price.
“The last time block halving occurred (28 November 2012), the bitcoin price enlargened te value by 1032 vanaf cent ter the proceeding six months (from US$12.16 to US$125.58). Unluckily, [the Australian Securities and Investments Commission] prohibited any forecasting on the bitcoin price which resulted te a report which did not permit for any increase ter bitcoin price upon the number of bitcoins available to be mined halving ter July 2016.”
Bitcoin halving is part of the original rules of Bitcoin and is aimed at reducing inflation ter a currency with a finite supply. The next halving is expected to occur around June 2016. It will mean Bitcoin miners will receive half their usual prize for verifying bitcoin transactions. Many argue this will increase the value of Bitcoin itself, however, but this is not certain.
Bitcoin Group – which wasgoed to be the 2nd Bitcoin company to list on the ASX and the only one globally to attempt a total IPO – appointed Grant Thornton to assess the company’s finances last month after numerous run-ins with the corporate regulator overheen disclosures te its original share suggest document.
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Grant Thornton forecast various scripts, the “base case” being a $500 Bitcoin price which would see it needing to raise funds again by September 2017.
But the ASX rejected the findings and said if the company wished to proceed attempting to list it would have to reopen its suggest and raise extra funds to “an amount sufficient to produce it adequate working capital to carry out its stated objectives and to have a sustainable business specimen.”
The company, which has now delayed its float by more than six times, already had to resubmit its prospectus to the ASX overheen projections for the stock. It also told the market last month that it had come well brief of its raising target of $20 million – with only $Five.9 million ter funds raised.
Bitcoin Group uses powerful computers to “mine” Bitcoin’s distributed ledger blockchain. This involves cracking ingewikkeld encryption of the blockchain, which is how bitcoin transactions are verified.
The company gets bitcoins spil a prize for doing this, so its future is closely tied to the value of the digital currency.
Extra reporting by Shaun Drummond
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