Banking News

Malaysian blockchain bond issuance canceled

bonds

Fusang Exchange, a new Malaysian blockchain bond issuance platform, has announced that its first bond issuance has been canceled. The LongBond issuance was initially to be $14 million with a headline figure of up to $3 billion. The bond proceeds were to be held as cash deposits in trust accounts at the Labuan branch of China Construction Bank (CCB).

On Friday the 13th of November, CCB reacted to press reports that it was not the bond issuer. The bond was to be issued by a special purpose vehicle, LongBond, with the bank acting as lead arranger and listing advisor.

Then this past Friday, the 20th of November, Fusang Exchange announced that the proposed issuance was canceled and that the “overall bond issuance programme is being re-evaluated.” It said the cancellation was communicated via CCB acting as listing sponsor, with no further reasons provided.

“The bank did not give a reason for the suspension, Fusang Chief Executive Henry Chong said,” is a quote from a Reuters report. 

However, the chairman of Fusang Exchange is David Chong. He is also listed as the representative of Gurker (Labuan) Limited, which acts as sole corporate director for LongBond, the issuer. Fusang Exchange, LongBond, the director Gurker (Labuan), and the share trustee Baixan Trust (Labuan) all have the same physical address. 

There was a minimum subscription amount of $10 million, so perhaps it didn’t look like it would be met.

Or maybe CCB had cold feet. Fusang Exchange promoted the headline $3 billion figure, despite the initial far smaller planned issuance. It also touted the association with China Construction Bank (CCB) and the fact that the tokens could be settled with Bitcoin, which CCB said it does not accept. This may have been palatable for the Labuan CCB branch initially, but perhaps it didn’t sit well when it was more widely reported and the news reached China.