Just In: Hong Kong’s OSL Exchange Considers Sale At $128 Mln

Hong Kong’s BC Technology Group Ltd. is reportedly considering the sale of its crypto platform OSL. The move comes as the crypto industry in Hong Kong grapples with challenges, including weak demand and regulatory issues. BC Technology has explored interest from potential buyers and may value OSL at around HK$1 billion or about $128 million, Bloomberg reported while citing people familiar with the matter.

Hong Kong’s Crypto Exchange OSL Under Review

BC Technology Group, a prominent player in Hong Kong’s crypto industry, is reportedly evaluating the potential sale of its crypto platform OSL. Notably, this development follows a series of challenges in the Hong Kong crypto market, including lackluster demand and regulatory complexities.

Meanwhile, according to sources familiar with the matter, BC Technology has reached out to potential buyers, including industry participants and funds. The proposed valuation for the leading crypto exchange, OSL in the sale discussions stands at approximately HK$1 billion, equivalent to $128 million. However, the talks are still in their preliminary stages, and no formal agreement has been reached.

OSL’s platform provides a range of crypto services, including prime brokerage, exchange facilities, and custody solutions for digital assets. Additionally, it offers infrastructure support to financial institutions seeking to enter the virtual asset trading space. Meanwhile, BC Technology may decide to sell specific segments of OSL rather than the entire platform, depending on market conditions and offers.

Despite Hong Kong’s efforts to establish itself as a hub for the crypto sector, the market continues to face hurdles. Last year’s market downturn, coupled with subsequent insolvencies, has impacted crypto demand. In addition, the city’s stringent regulatory framework may result in higher operational costs for crypto businesses.

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Other Key Developments From BC Technology

In recent developments, the unlicensed JPEX exchange scandal has tarnished the image of the digital asset industry in Hong Kong. Notably, authorities allege that the exchange defrauded investors of HK$1.6 billion or around $205 million. This incident has raised concerns about the overall oversight and regulatory enforcement in the crypto space.

Meanwhile, BC Technology reported a net loss of HK$95 million for the first half of 2023, a significant improvement from the previous year’s HK$300 million loss during the same period. OSL’s digital asset and blockchain platform business are vital income contributors for BC Technology.

The interim report indicates that OSL’s cryptocurrency trading volume dropped by nearly 50%, amounting to HK$112.6 billion in the first half of 2023 compared to the previous year.

While BC Technology’s market value has rebounded from a low point in August, it remains 80% below its peak in June 2021.

Meanwhile, the challenging environment in Hong Kong presents both hurdles and opportunities for crypto businesses. BC Technology’s decision regarding the potential sale of OSL will likely shape its future strategy in this evolving landscape.

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