The cryptocurrency exchange BTCC has agreed to give up almost half of its mining operations. The mining arm of the company, BTCC Pool Limited is expected to go to Hong Kong-based Value Convergence Holdings Limited (VCHL), pending due diligence and final contract negotiations. If things stay as they are, VCHL will take possession of 49% of the company for about $17 million.
VCHL released a memorandum of understanding (MOU) outlining the details of the sale yesterday. VCHL is a publicly traded company on the Hong Kong Stock Exchange that deals in securities and asset management and, soon, cryptocurrency mining. The move is the latest in VCHL’s quest to expand more into the FinTech and cryptocurrency spaces.
VCHL will purchase the company for a combination of cash and shares, but the exact breakdown has not yet been divulged. The share price will be fixed at $0.19 a piece, approximately 8% less than the market listed price. BTCC is obligated to guarantee a net profit of $3.8 million through June 30, 2019 or will be on the hook for any difference once the contract negotiations are finalized.
BTCC was previously known as BTC China. Following moves by the People’s Bank of China that banned initial coin offerings (ICO) and exchanges last year, the company moved out of China and became registered in the UK. It was then acquired by a Hong Kong-based blockchain investment firm at the beginning of this year. BTCC operates three core businesses – its Mobi crypto wallet, a USD/BTC exchange and the mining operations. BTCC is also the company behind the now defunct DAX exchange.
BTCC’s share of the crypto mining space has dropped significantly since January. It started the year controlling around 3.3% of the market, but that figure is now down to around 1.1%. According to CoinMarketCap, the company was trading as much as $123 million in January and was the eighth highest-ranked exchange in terms of volume. It now only trades approximately $41 million.
BTCC was founded by Bobby Lee, brother of Litecoin founder Charlie Lee. He is a Stanford computer science graduate who was previously the VP of Technology for Wal-Mart China.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.