<p>BC Technology Group, a Hong Kong-based investment holding company, has firmly denied recent reports suggesting it is exploring the sale of its licensed digital asset business, OSL, for up to HK$1 billion (US$137.3 million).</p><h2 id="header-0">Company stock plummets</h2><p>This comes in response to a<a href="https://medium.com/&#64;coinness.gl/hong-kong-crypto-exchange-contemplates-sale-at-hk-1-billion-valuation-b63b0ab7bd49" rel="noopener noreferrer nofollow"> report</a> that emerged via Bloomberg on Monday. The news of the possible sale had a significant impact on the company’s stock, which plummeted by over 22% to HK$3.35 the following day.</p><p>BC Technology Group, which has been listed on the Hong Kong stock exchange since 2012, is the parent company of OSL. The reports hinted at the possibility of selling off parts of the business, citing undisclosed sources.</p><p>In response to these rumors, BC Technology Group issued a<a href="https://media-bcgroup.todayir.com/20231017143201128610934987_en.pdf" rel="noopener noreferrer nofollow"> formal statement</a> to clarify the situation, deeming the article “factually inaccurate and highly misleading.” It vehemently refuted any intention to sell OSL, a key player in the cryptocurrency exchange sector.</p><h2 id="header-1">First licensed exchange</h2><p>OSL was the first cryptocurrency exchange to be licensed by the Securities and Futures Commission (SFC) in Hong Kong in 2020, initially operated under a voluntary scheme and was limited to serving professional investors. However, the recent licensing requirement broadened its scope, allowing it to cater to retail investors as well, including popular cryptocurrencies like Bitcoin and Ethereum.</p><p>Both OSL and HashKey had their licenses upgraded this year, enabling them to serve retail investors as per the new policy. However, the reception to this new regulatory framework has been somewhat lukewarm, with only five local exchanges applying for the new virtual asset trading platform (VATP) license. The SFC had to<a href="https://medium.com/&#64;coinness.gl/hong-kong-takes-steps-to-enhance-crypto-platform-oversight-71af80833e4d" rel="noopener noreferrer nofollow"> publish a list</a> of applicants following a financial scandal involving the JPEX crypto exchange, which led to over 2,500 complaints and losses totaling approximately HK$1.5 billion.</p><p>The backdrop of this unfolding situation is Hong Kong’s efforts to establish itself as a significant virtual asset hub. The city announced its ambition to transform into a hub for digital assets a year ago, drawing considerable attention from cryptocurrency exchanges. These efforts included implementing new regulations in June that mandated licensing for cryptocurrency exchanges.</p><p>Several companies with connections to Hong Kong and mainland China have expressed their intent to obtain a license, potentially taking advantage of Hong Kong’s favorable stance toward virtual assets when compared to mainland China’s strict regulations.</p><h2 id="header-2">High compliance costs</h2><p>Nonetheless, high compliance costs in Hong Kong continue to pose a barrier, potentially preventing the city from becoming the primary base of operations for crypto businesses. Industry insiders estimate that the cost of compliance from start to finish can be as high as HK$60 million for a company. Firms have reported that obtaining a trading license in Hong Kong can<a href="https://medium.com/&#64;coinness.gl/hong-kong-web3-companies-invest-millions-in-vasp-licenses-7acb3139a9a" rel="noopener noreferrer nofollow"> involve</a> an outlay of between HK$20 million and HK$200 million.</p><p>As per BC Technology Group’s mid-year report, the company reported a net loss of HK$94.7 million in the first half of 2023. This marked a notable improvement compared to the HK$312.1 million in losses during the same period the previous year. OSL remains a significant source of income for the company.</p>

OSL Parent Company Denies Sale Plans

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