ASIC Builder Canaan Considering US IPO After Hong Kong Filing Rejected

Colin Muller

Canaan Creative, a producer of application-specific integrated-circuit cryptocurrency miners (ASICs) and competitor to Bitmain, is considering conducting an Initial Public Offering (IPO) in the US after its IPO application to the Hong Kong Stock Exchange (HKEX) lapsed and was therefore rejected by default. Bloomberg reported the news today citing insider sources.

The China-based ASIC firm is in talks to “[sell] shares in New York as soon as [H1],” according to Bloomberg. Canaan had hoped to be trading on the HKEX by July 2018, after filing in May.

CryptoGlobe reported in November that Canaan’s IPO application in Hong Kong had expired to no result, despite backing from big names such as Morgan Stanley, Deutsche Bank AG and Credit Suisse Group. The firm had to continuously adjust its raising targets down, first from $2 billion to 1$ billion, then to $400,000.

An anonymous source, cited by CoinDesk, claimed that the HKEX was tepid on crypto-related businesses because of the industry’s youth and volatility, and that this coolness was causing delays in application approval. The source added that “The HKEX doesn’t want to be the first exchange in the world to approve [an ASIC producer] and have [it] die on them”

The three largest ASIC producers - Bitmain, Canaan and Ebang - had all filled for IPOs in Hong Kong during 2018. Bitmain’s and Ebang’s prospects for approval are not much better.

Success in the US?

The South China Morning Post (SCMP) recently reported that the HKEX, briefly an attractive IPO destination for Chinese tech firms after a 2018 reform of its listing rules, is rapidly waning in popularity in favor of US listing.

This is apparently due to the poor market performance of tech companies listed in Hong Kong, below expectations. Analysts cited by the SCMP claim that the US has a “a deeper investor base for technology companies,” and that IPOs there could be smaller and still succeed.

Canaan reported $191 million of revenue in 2017, according to its HKEX filing - far dwarfed by Bitmain’s $2.5 billion revenue during the same period.

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Venezuelans File $30M Lawsuit Against "Diamond Backed" Crypto Ponzi Scheme

  • A $30 million lawsuit has been filed against a troubled cryptocurrency that claimed to be backed by diamonds.
  • Over 300 amateur investors were defrauded by the owners of two diamond companies, who attempted to create a cryptocurrency to keep a failed Ponzi scheme running. 

A new lawsuit filed this month has revealed further details about what took place behind the scenes at the troubled cryptocurrency "Argyle Coin."

According to the lawsuit, the entire cryptocurrency project was nothing more than a desperate attempt to keep a pre-existing Ponzi scheme alive and repay investors who were anxiously awaiting their dividends.

The group of Venezuelans behind the lawsuit say that they are among 300 amateur investors who got caught up in the Ponzi scheme, according to Law360.

The alleged masterminds of the scam, Jose Angel Aman, Harold Seigel, and his son Jonathan Seigel, ran two diamond trading firms Natural Diamonds and Eagle Financial. The two companies were connected with Argyle Coin, a cryptocurrency Ponzi scheme which was said to be backed by diamonds.

Natural Diamonds predated Argyle Coin and seems to be where the scam originated. The firm reportedly lured investors to pour money into their operations by overstating their expertise in the diamond industry.

Since 2014, Aman was promising investors a 24% return on their investment within two years through his company Natural Diamonds, having no clue how he was going to fulfill his promises. By 2015, Aman was working with his two accomplices, selling fraudulent investment contracts through Eagle Financial, and using those funds to pay back previous investors.

According to court documents:

“[Eagle Financial] and its principals overstated their experience in the diamond and jewelry businesses to lure investors into trusting [Eagle Financial] and its principals with their investment.”

The lawsuit suggests that the fraudsters used all of the investments that they received paying back previous clients, and never actually did anything with the money that would earn a return. Still, the defendants in the case continued to lie to investors and promise unrealistic returns to their investors.

Then, things became even worse when the men behind the scheme decided to develop a cryptocurrency project to raise funds.

They made very similar promises with Argyle Coin, reportedly telling investors that putting their money into their diamond-backed cryptocurrency was a “risk-free” venture, while once again using that money to back other investors.

Sadly, the investors were left out in the cold when the project never materialized, and the Ponzi scheme came crashing down. This is just the latest in over a dozen lawsuits against the failed crypto project.