Hong Kong-based Madison Holdings has announced its intent to buy a 67.2 percent stake in the BitOcean cryptocurrency trading platform, the South China Morning Post reported on Wednesday. The proposed acquisition is part of Madison’s long-term effort to diversify its business holdings. According to the report:
In a filing to the secondary board of the Hong Kong bourse this month, the company said Madison Lab, a subsidiary, is to acquire 67.2 per cent of BitOcean from independent third parties for 1.68 billion yen (US$15.12 million), plus about another US$15 million in various fees. The platform is one of 16 operators currently registered with Japan’s Financial Services Agency, but has not started trading yet.
Madison chairman Raymond Ting Pang-wan explained that the current low prices for Bitcoin make this an ideal time for his company to move into the cryptocurrency industry. Since last December, Bitcoin’s price has dropped from an all-time-high of nearly $20,000 to its current value of between $3,000 and $4,000. Because his company is looking to the long-term prospects for the industry, he said that Madison is “not worried about short-term volatility.”
As the Morning Post notes, Madison’s reputation was largely built on “trading in fine French wine.” However, the relative size of that market was cited by Ting as the primary reason for the company’s decision to expand into fintech and the emerging crypto industry:
“Our wine business is stable and profitable, but then it is small. It is hard to make wine trading into a very big business. This is why we have to diversify into financial technology and the cryptocurrency business – to achieve a better return for our shareholders.”