Today Bloomberg reported that Hong Kong’s BC Technology is exploring the sale of its crypto platform OSL for around HK$1 billion ($128m), citing sources. OSL includes a digital asset exchange – one of only two with Hong Kong licenses. Additionally, it provides prime brokerage and custody services. The company might be sold as a whole or in part. Update: BC Technology said the Bloomberg report is false.
BC Technology is Standard Chartered’s partner in Zodia Markets, the crypto brokerage and exchange, and owns just shy of a quarter of Zodia’s stock. The bank holds the remainder.
Following the Bloomberg news, BC Technology’s stock price hardly moved. It is currently valued at HK$1.8 billion with most of its recent income coming from OSL. Interim accounts to late June show 83% of its revenues derived from digital assets and blockchain, with the balance from real estate.
However, the HK$105 million in digital asset revenues for the first half can partly be attributed to crypto price movements – HK$71.6 million was from trading digital assets. Bitcoin’s price rose more than 80% during the first half of 2023. Total trading volume on the digital assets platform was down 47.5% to HK$112.6 billion, with the biggest decline coming on the exchange – a 74% drop in volumes.
Losses narrowed significantly from HK$312.1 million in the first half of last year to HK$94.7 million this year. A big part of that was cost cutting, with the company more than halving its headcount.
Until recently, OSL could only target institutional investors. That changed when new rules came into effect in Hong Kong on June 1 and the upgrade in the exchange’s license in August. The other licensed platform in Hong Kong is HashKey. Meanwhile, the crypto ecosystem in Hong Kong is reeling from its own FTX moment with the collapse of the unregulated exchange JPEX.
Update: Added BC Technology statement that the report is false.