Hong Kong-Based Financial Services Firm To Acquire 49% of BTCC Mining Pool

Hong Kong-Based Financial Services Firm To Acquire 49% of BTCC Mining Pool

The cryptocurrency exchange BTCC’s mining pool business, BTCC Pool Limited, has reportedly agreed to sell 49% of its equity. If finalized, this deal would see the 49% acquired by the Hong Kong-based Value Convergence Holdings Limited financial services firm.

Value Convergence recently released a statement which clearly outlines how the acquisition would be undertaken. Value Convergence would purchase 4,900 shares in BTCC Pool, which translates to a 49% stake, and the deal would reportedly raise approximately $18.7 million.

Moreover, Value Convergence has signed a memorandum of understanding (MoU) which, although not legally binding, clearly communicates the intent of Value Convergence to go through with the purchase of BTCC Pool, through its subsidiary Initial Honor Limited.

The MoU, which is not final and could admittedly be subject to revisions, includes a notable clause which states that the audited net profit of BTCC Pool should see a guaranteed minimum of $3.82 million after taxation for the fiscal year which ends in June of 2019.

Value Convergence mainly operates a securities brokerage within the greater China area, as well as some other business through its many subsidiaries.

The acquisition of BTCC Pool would mark the firm’s first entry into the cryptocurrency industry, and is said to signal a more comprehensive shift intended to grow Value Convergence’s presence in the fintech sector – even though the Bitcoin mining pool business would technically be purchased by Value Convergence’s subsidiary Initial Honor Limited.

Notably, this somewhat follows in the footsteps of BTCC, which was also acquired by a Hong Kong-based company earlier this year. BTCC, formerly known as BTC China, was forced to exit the Chinese market following new regulations in relation to ICOs and the cryptocurrency sector in general.

At the moment, BTCC’s activity mainly involves the aforementioned mining pool, as well as a cryptocurrency wallet dubbed ”Mobi”, as well as a USD/BTC exchange. Although this acquisition, if realized, would give significant control over the BTCC mining pool to Value Convergence, BTCC would still hold a stake of its own in the pool.

Recent data from the website blockchain.info has also revealed that the BTCC Pool currently accounts for around 1.1% of Bitcoin’s hashing power. Whilst this is a sizable amount, it is dwarfed by the large mining pools operated by Chinese cryptocurrency mining behemoth Bitmain.

More specifically, it was recently reported that Bitmain had claimed a whopping 42% of the total blocks on the Bitcoin network last week. Whilst BTCC Pool does not rival this, a 1.1% of the total hashrate of Bitcoin is still nothing to scoff at. Nonetheless, it remains to be seen whether both parties in the BTCC Pool acquisition will honor the non-binding MoU.

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