- Hong Kong-based cryptocurrency exchange OSL has secured an investment for cryptocurrency advancement.
- The exchange contemplated a complete sell-off earlier this year.
- The founder of BGX has become the largest shareholder in BC Technology Group.
As one of the first two exchanges to obtain an operational license in Hong Kong, cryptocurrency exchange OSL has operated as a regulated hub for trading and exchange services. Despite its initial success, the exchangeโs journey has been marked with financial challenges throughout 2023.
On November 13, OSL announced the suspension of all operations on its platform at the request of its parent company, BC Technology Group, in anticipation of a pending announcement related to a transaction. Now, the exchange has secured a substantial investment, bolstering its financial situation.
Revitalizing OSL
In a joint press release on November 14, fintech and digital asset company BC Technology Group announced that it had received an investment amount of approximately HK$710 million ($90 million) for its subsidiary, OSL, from crypto service provider BGX.
Sponsored
The investment fortifies OSLโs capital strength following several months of underperformance as BC Technology Groupโs primary income contributor, which allegedly impacted the companyโs market value with an 80% decline.
The firm anticipates that the new partnership will allow OSL to enhance its product offerings, such as cryptocurrency trading and exchange services, prime brokerage, and infrastructure support to financial institutions engaged in virtual asset trading.
BC Technology Group chief executive officer Hugh Madden expressed enthusiasm about the development.
โIt's a significant endorsement of our strategy to lead with regulation and compliance, enabling us to continue offering our institutional, professional, and retail investors the best-in-class digital asset services.โย
The announcement marks a positive shift for OSL and BC TechnologyGroup, following reports of financial troubles that culminated in the serious consideration of a sell-off in October.
Unpacking the Contemplated Sell-Off
On October 16, reports emerged of OSL facing a potential shutdown as BC Group contemplated selling off its cryptocurrency platform due to several months of unprofitability.
A 2023 interim report revealed that OSL had been operating at a loss, resulting in a staggering loss of HK$95 million for BC Technology as it struggled to keep the exchange afloat.
Despite providing a wide range of services including asset trading and exchange, the exchange witnessed a significant drop in trades, halving since June 2022.
BC Groupโs decision to sell the exchange was likely influenced by the September JPEX scandal in which local investors lost more than $400M, significantly rattling the regionโs confidence in the cryptocurrency industry and affecting the performance of other exchanges in the region.
On the Flipside
- BGX founder Liu Shuai currently holds approximately 29.97% in shares of BC Technology, marking his position as the firmโs largest shareholder.
- OSL is yet to make an official announcement regarding the resumption of operations on its platform.
- Ongoing speculation abounds regarding crypto exchange Bitgetโs Hong Kong subsidiary, BitgetX, potentially investing in OSL, following the exchangeโs recent market exit.
Why This Matters
The domino effect triggered by the JPEX scam has prompted crypto exchanges to exit the regionโs market and the potential resurgence of OSL could impact the industryโs trajectory.
South Korea’s regulatory landscape tightens with a new policy mandating crypto transparency for political players. Read more:ย
South Korea Demands Politicians To Disclose Crypto Portfolioย
Discover further details on the suspension of operations by Bitget and its exit from the Hong Kong market:
Bitget Ends Bid For Hong Kong Crypto License, Exits License
