Despite the severe market, Hongkong stock exchange ‘Madison Holdings Group’, GEM board is all set to acquire 67.2 percent of the stake from BitOcean, a Japanese crypto trading platform. BitOcean will take up the stake of Madison Lab for 1.68 billion yen (US$15.12 million) from Independent third party and the US $15 million in various fees. Concerning the matter, Kenneth Leung Kai-Cheong who is a Hong Kong lawmaker said that the firm with an enormous reputation in fine wines industry will be a brand new player in the virtual market.
Japan’s Crypto Friendly Nature Attracts Hong Kong Listed Wine Firm
According to the South China Morning Post, the decision comes forth following the severe interest of cryptocurrency trading across Japan. Raymond Ting Pang-wan who is the chairman at Madison said that;
“Japan represents about 20 percent of bitcoin trading worldwide. Japan and the US are the only two markets that have a licensing system for such trading platforms. We wanted to invest in a platform that was under proper regulation,”
As a plan to diversify its present trading business and to develop its own trading platform, Medison Labs is also planning to finalize the deal with HDR Cadenza Management which is a subsidiary of HDR Global Trading (the firm which has owned BitMEX). However, the company officials have said that the deal has not been finalized yet.
“Our wine business is stable and profitable, but then it is small. It is hard to make wine trading into a very big business. This is why we have to diversify into financial technology and the cryptocurrency business – to achieve a better return for our shareholders,” He added that. “Virtual currencies and blockchain are getting more popular. Investing in the virtual currency sector will expand our income source.”
Moreover, the announcement of deal enters into the market when the market was suffering the declining graph, Nevertheless, it didn’t make negative sense for the deal. In fact, Ting said that it is a right to enter into diversifying plan in the crypto market. He said that;
“Bitcoin is cheap, which has created a good opportunity for us to enter the market. We are eyeing the long term, so we are not worried about short-term volatility,”
Investors need to pay attention to the risks involved when a company operates in two separate business lines.”
The acquisition of BitOcean will not cost any risk to the firm – as Gary Cheung Wai-Kwok who is the chairman of the Hong Kong Securities Association said that ;
This is a small investment for the company, Gary continued that It makes sense for the company to diversify its business to achieve a higher income.”