News

Madison partnered with BitMEX to build the world’s leading licensed cryptocurrency exchange?

HONG KONG,
CHINA - 
Media
OutReach
 - 14 December 2018 - Recently,
Hongkong listed company Madison
?8057.HK?has
issued in consecutive two announcements with indication of the clear
involvement of BitMEX, renowned as one of the world's largest independent
digital supply chain providers.

 

The
first announcement issued by Madison on December 9 was the signing of the
acquisition agreement, which verified the news of November 20 when the company
announced that its subsidiary, Madison Lab Limitted, was planning to acquire a 67.2% stake in Bitocean, a Japanese cryptocurrency trading
platform, which subsequently boosted the company's stock price up by 40% the
same day.  Yet, a few days later, some
reports pointed out that few of the company's frequent acquisitions made it any
further
after
its stock price was pulled up. For example, the company announced at the
beginning of this year that it offered high price for 20% stake from BITPoint,
another licensed exchange in Japan. However, the dealing was terminated in a
few months.

 

The
abortion of this acquisition was reportedly due to Madison's judgement upon
BITPoint's weak revenue capacity. Interestingly, after half a year, the
company decided to purchase a much smaller exchange  in spite of the long
bear market.

 

On
December 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 industry
have found HDR appears to be affiliated with Bitmex.
Given
that BITMEX per se cannot operate its own capital, it is clear that HDR is its
legal entity.

 

BitMEX
has been the leader in cryptocurrency trading with tens of billions of market
value. And its daily trading volume remains over 2 billion US dollars,
surpassing other exchanges in the industry. Data authenticity and brand
competition have made BitMEX stand out in the digital exchange market and
attract more futures trades under the fluctuated bear market. Its revenue
capacity was not affected by even the bear-market bottoms.

 

Bitocean,
by comparison, has relatively less branding and potential, and what both
parties need to pay is just the license cost. BitMEX is expected to move its
mature products to the Japanese market first, and then possibly transfer gradually
the main body and most of its trading volume to get the protection of Japanese
compliance licenses. Since BitMEX's trades are mainly Bitcoin futures, Japan's
regulation 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 legal
cryptocurrency trading platform.

 

In
terms of capital, although the market is constantly maturing and improving,
organizations such as asset management companies, pension funds and investment
banks have not yet supported the bitcoin transactions, in that the supervision
is not clear enough and the exchanges are often hacked. However, the security
and professionality attributes of BitMEX futures trading, coupled with the
blessing of licenses, have made BitMEX an important partner for Madison to
enter the industry, even under the current trading structure.

 

Madison
certainly stood to firm reasons for making this acquisition. Although started
by trading high-end wines, Madison acquired CVP Capital Limited and CVP Asset
Management 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 Diginex
High Performance Computing Limited, aiming for not only the blockchain mining
industry, but also the advanced computing output capability in 5G
telecommunication. In addition, a joint venture focusing on blockchain commercialization
consulting, the Blockhouse Technology Limited, was recently established by
Madison and Oxford University collaboratively. It is undeniable that Madison is
now transforming to target at the financial market, especially the blockchain.

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