HONG KONG,CHINA - MediaOutReach - 14 December 2018 - Recently,Hongkong listed company Madison（8057.HK）hasissued in consecutive two announcements with indication of the clearinvolvement of BitMEX, renowned as one of the world's largest independentdigital supply chain providers.
Thefirst announcement issued by Madison on December 9 was the signing of theacquisition agreement, which verified the news of November 20 when the companyannounced that its subsidiary, Madison Lab Limitted, was planning to acquire a 67.2% stake in Bitocean, a Japanese cryptocurrency tradingplatform, which subsequently boosted the company's stock price up by 40% thesame day. Yet, a few days later, somereports pointed out that few of the company's frequent acquisitions made it anyfurther afterits stock price was pulled up. For example, the company announced at thebeginning of this year that it offered high price for 20% stake from BITPoint,another licensed exchange in Japan. However, the dealing was terminated in afew months.
Theabortion of this acquisition was reportedly due to Madison's judgement uponBITPoint's weak revenue capacity. Interestingly, after half a year, thecompany decided to purchase a much smaller exchange in spite of the longbear market.
OnDecember 11, Madison announced the details of a potential sale where a 51%stake in Madison Lab Limited would be sold to HDR Cadenza Management Limited（HDR）,including 51% profit in the 67.2% stake owned by Bitocean. Some insiders in the industryhave found HDR appears to be affiliated with Bitmex. Giventhat BITMEX per se cannot operate its own capital, it is clear that HDR is itslegal entity.
BitMEXhas been the leader in cryptocurrency trading with tens of billions of marketvalue. And its daily trading volume remains over 2 billion US dollars,surpassing other exchanges in the industry. Data authenticity and brandcompetition have made BitMEX stand out in the digital exchange market andattract more futures trades under the fluctuated bear market. Its revenuecapacity was not affected by even the bear-market bottoms.
Bitocean,by comparison, has relatively less branding and potential, and what bothparties need to pay is just the license cost. BitMEX is expected to move itsmature products to the Japanese market first, and then possibly transfer graduallythe main body and most of its trading volume to get the protection of Japanesecompliance licenses. Since BitMEX's trades are mainly Bitcoin futures, Japan'sregulation will be beneficial for it, and its trade can be promoted in public. Thus,the Bitocean brand seems promising in becoming the world's largest legalcryptocurrency trading platform.
Interms of capital, although the market is constantly maturing and improving,organizations such as asset management companies, pension funds and investmentbanks have not yet supported the bitcoin transactions, in that the supervisionis not clear enough and the exchanges are often hacked. However, the securityand professionality attributes of BitMEX futures trading, coupled with theblessing of licenses, have made BitMEX an important partner for Madison toenter the industry, even under the current trading structure.
Madisoncertainly stood to firm reasons for making this acquisition. Although startedby trading high-end wines, Madison acquired CVP Capital Limited and CVP AssetManagement Limited in 2017, possessing No. 1, 4, 6, and 9 licenses from HK SFC.And in 2018, it acquired a tech company specialized in computing power called DiginexHigh Performance Computing Limited, aiming for not only the blockchain miningindustry, but also the advanced computing output capability in 5Gtelecommunication. In addition, a joint venture focusing on blockchain commercializationconsulting, the Blockhouse Technology Limited, was recently established byMadison and Oxford University collaboratively. It is undeniable that Madison isnow transforming to target at the financial market, especially the blockchain.