Bitcoin Group has scrapped its long awaited plans to become the world’s first publicly floated bitcoin mining firm.
The Melbourne-based company’s initial public offer (IPO) closed on January 25, with the company’s first day of trading on the Australian Securities Exchange (ASX) originally scheduled for February 2, 2016.
Instead of trading, however, Bitcoin Group is now returning the AU$5.9 million it raised to investors.
“The key reason for the withdrawal of the offer is due to the requirement of the ASX, that Bitcoin Group procure a working capital report from an independent accounting firm, a report not specifically required for a listing on the ASX,” Bitcoin said in a letter to investors.
The company’s independent accounting firm was required to factor in the reduction of newly minted bitcoins caused by so-called `block halving’ in July 2016, without regard to the expected increase in bitcoin price, the letter said. According to Bitcoin Group, the last time block halving occurred in 2012, the bitcoin price soared in the proceeding six months.
The corporate regulator prohibited any forecasting on the bitcoin price, meaning the working capital report was unable to allow for any increase in the cryptocurrency’s price once the number of bitcoins available to be mined halved