ipo

Bitcoin miner Phoenix surges 50% after $371M Abu Dhabi IPO

Crypto mining firm Phoenix Group has debuted trading on the Abu Dhabi Securities Exchange, with the stock opening at $0.6.

Cryptocurrency mining firm Phoenix Group has debuted trading on the Abu Dhabi Securities Exchange (ADX), becoming one of the Middle East’s first publicly listed industry firms.

The Phoenix Group stock price opened at 2.25 dirhams ($0.6) on Dec. The price has soared as much as 50% from the initial public offering (IPO) price of 1.50 dirhams ($0.41) as per the Phoenix IPO prospectus.

The public listing comes a few weeks after Phoenix Group successfully closed its IPO with an oversubscription of 33 times on Nov.

The cryptocurrency miner aims to use the IPO proceeds to fund its future growth and deliver positive returns for investors. According to Phoenix Group co-founder and CEO Bijan Alizadeh, the company’s ambitions are anchored by four pillars: “innovation in Bitcoin mining, renewable energy ventures, advanced manufacturing capabilities and strategic acquisitions.”

Founded in 2015 by Alizadeh and Munaf Ali, Phoenix is a major company in the Middle East blockchain industry, collaborating with major regional authorities. In August 2023, Phoenix signed an agreement to build a $300 million crypto mining farm in Oman in the presence of Omani Minister of Transport Saeed Al Maawali and chairman of the Abu Dhabi Stock Exchange, Hisham Malak.

One of the main aspects of Phoenix’s vision is its commitment to sustainability in cryptocurrency mining or using renewable sources for cryptocurrency mining.

Chia Network says it submitted IPO registration to SEC after leadership shuffle

The green blockchain company revealed no details of the proposal; the new CEO said the IPO would probably occur next year.

The Chia Network blockchain said on April 14 that it had submitted a proposal for an initial public offering (IPO) to the United States Securities and Exchange Commission (SEC). The size and price range of the offering have not been determined, the company said. The proposal was submitted confidentially, and the announcement was made under a Securities Act of 1933 rule to allow limited information to be released to measure investor response.

The Chia Network is a decentralized smart contract platform that uses a novel consensus protocol based on data storage space. It claims the network has lower energy consumption than blockchains that use proof-of-work consensus and can re-utilize worn storage hardware. BitTorrent founder Bram Cohen created the Chia Network in 2017.

Despite some questions about the network’s green claims, the company raised $61 million in a funding round in 2021 with backers that included Andreessen Horowitz, Richmond Global Ventures and other venture capitalists. The company was reportedly valued at $500 million at that time.

Cohen served as Chia Network CEO until January when he transitioned to the roles of chairman and chief technology officer. Cohen was replaced as CEO by Gene Hoffman, who moved up from chief operating officer.

Hoffman told Bloomberg at the time of his promotion that the company would file for an IPO “soon,” but he did not foresee the offering taking place this year. “This market is not going to be open for us,” he said.

$XCH is continuing to trade above the #MA50…

The last time #Chia had this momentum we continued to ~$50 pic.twitter.com/ENJu2ht9Ns

— .chiamojo.xch (@chia_mojo) April 12, 2023

The crypto market reacted positively to the Chia Network announcement, with the native Chia (XCH) token rising from $40.68 at the beginning of the U.S. workday to $45.35 at the time of writing, according to CoinMarketCap.

Meanwhile, Singapore-based crypto miner Bitdeer made its premier on Nasdaq on April 14 in a much-delayed move that has been in the works since 2021. Bitdeer shares fell 18% in trading by 9:33 am Eastern Time that day.

Magazine: Green consumers want supply chain transparency via blockchain

SEC alleges fintech and ‘market maker’ firms manipulated crypto market in token scheme

Though the SEC has pursued many enforcement actions related to initial coin offerings, the regulator’s stance on airdrops’ role in alleged token schemes is unclear.

The United States Securities and Exchange Commission, or SEC, has announced charges against Hydrogen Technology Corporation and its market marker Moonwalkers Trading Limited related to allegedly perpetrating a scheme to manipulate the trading volume and price of Hydro tokens.

In a Sept. 28 announcement, the SEC said former Hydrogen CEO Michael Ross Kane hired Moonwalkers and its CEO Tyler Ostern “to create the false appearance of robust market activity” following the distribution of Hydro tokens through an airdrop, bounty programs and direct sales in 2018. Kane then had Moonwalkers sell the tokens in the “artificially inflated market” for more than $2 million in profit on behalf of Hydrogen.

“As we allege, the defendants profited from their manipulation by creating a misleading picture of Hydro’s market activity,” said Joseph Sansone, chief of the SEC Enforcement Division’s market abuse unit. “The SEC is committed to ensuring fair markets for all types of securities and will continue to expose and hold market manipulators accountable.”

According to the SEC, Kane’s, Ostern’s and the companies’ actions constituted manipulation of the crypto market, violating provisions of U.S. securities laws. The regulator reported Ostern had consented to pay more than $40,000 in disgorgement and interest, subject to approval by a New York federal court “with civil monetary penalties to be determined at a later date.” The SEC’s complaint sought similar actions against Kane, as well as having the former CEO barred from holding officer and director positions.

Many in the crypto space criticized the SEC complaint as an example of regulation by enforcement — in this case, claiming the regulator was extending airdrops to its purview.

“They say airdrops meet the Howey test’s “investment of money” prong, even if no one makes an investment and no money changes hands,” said Jake Chervinsky, head of policy at the crypto advocacy group Blockchain Association. “The SEC talks a lot about airdrops, but then only seems to argue that distributions via direct sales, bounty programs and employee compensation are securities transactions.”

Others suggested that while the SEC’s actions may have been seemingly par for the course on crypto enforcement, they may not have necessarily been targeting token airdrops:

To be fair, the complaint seems to suggest that the “bounties” where users were rewarded with tokens for a promotional action count for that clause. Not the generic airdrop.

I still don’t think that should merit an “investment of money” but there is arguably more precedent.

— Adam Cochran (adamscochran.eth) (@adamscochran) September 28, 2022

Though the SEC has pursued many enforcement actions against initial coin offerings among crypto firms, the regulator’s stance on airdrops’ role in alleged token schemes is unclear. Commissioner Hester Peirce said in a February 2020 speech that the SEC has hinted a token airdrop “might constitute an offering of securities.”

“Since the SEC has found that some tokens can be securities, if you are considering using an airdrop token distribution, be warned that even giving away tokens is not necessarily free from scrutiny under securities law,” said crypto lobbying group Coin Center’s research director Peter Van Valkenburgh in a 2017 blog.

Chinese chip designer reportedly filed for $50M Nasdaq IPO

Chinese mining chip designer Nano Labs has applied for an initial public offering (IPO) in the United States to raise $50 million on Nasdaq amid sluggish market conditions.

According to information obtained by the Renaissance Capital IPO monitoring tool, the Huangzhou-based crypto mining chip maker has filed with the regulator, the U.S. Securities and Exchange Commission (SEC), for its upcoming public offering on Nasdaq, the world’s second-larges stock exchange.

The application for American depository shares is occurring amid a slew of regulatory difficulties in China and the United States, causing a shortage of Chinese issuers’ overseas fundraising. Only two IPOs took place in 2022 in New York, raising $49.5 million, compared to 28 IPOs, which raised $5.8 billion last year.

Nano Labs, however, is pressing ahead with its Nasdaq offering even though it has yet to produce a viable product. The firm plans to transform into a metaverse business, providing computing power for gaming and entertainment.

A metaverse is a new online environment being developed on the blockchain. Users may create avatars and own digital property in these virtual realms, sometimes referred to as “next-generation internet” or Web3 applications.

The two main shareholders of Nano Labs are co-founders Kong and Sun Qifeng, with 32.8% and 22.3% stakes, respectively. Kong was previously the co-chairman and a director at rival Canaan, which became the first cryptocurrency-mining rig maker to list in the U.S. in November 2019. In August 2020, he departed Canaan amid a corporate power struggle, according to reports from China then.

Nano Labs’ products are used to mine cryptocurrencies such as Bitcoin (BTC), Ether (ETH) and Filecoin (FIL). In 2020, the company’s earnings were derived solely from China-based clients. To expand sales overseas, it established a subsidiary in Singapore last year.

After Beijing cracked down on crypto activities in May 2021, China, which was previously the world’s biggest cryptocurrency mining location, witnessed some activities being pushed underground. In July last year, the hash rate, a metric of the network’s computing power for validating transactions and creating new digital assets, briefly went to zero.

Even if the IPO is a success, Nano Labs faces the danger of being delisted. If a U.S. audit regulator fails to examine Chinese accounts for three years, mainland Chinese firms may be delisted from American markets by 2023. Nano Labs claimed it would face this problem as a result of auditing work done by its accounting firm’s offices in China.