Hong Kong energy firm punts on blockchain amid huge crypto losses
A publicly-traded energy firm in Hong Kong has announced a rebrand as part of plans to focus on cryptocurrency, despite reporting huge trading losses from their involvement in digital assets to date.
Global Energy Resources International Group, which is listed on the Hong Kong Stock Exchange, submitted proposals for a name change to “Global Token Limited,” to reflect its change of industry.
The company took its first steps in the cryptocurrency world with the launch of several trading platforms over the last few months, and has since invested in blockchain startups and cryptocurrencies.
In the company’s annual report, it was noted that the company had set aside a portion of net proceeds to invest in cryptocurrency.
“As announced by the Company on 18 January 2018, the Board had resolved to re-allocate approximately HK$50 million ($6.3 million) of the unutilized net proceeds…to make investment in, among others, cryptocurrency,” according to Global Energy Resources.
By the end of June 2018, the firm had invested up to $2.04 million in cryptocurrencies—amid prolonged bear market conditions which saw losses of up to 50%, at $1.02 million. Among its investments, Global Energy Resources has holdings of 20 million XPA tokens, and 2,135 ETH tokens, worth a combined value of $1.2 million at the time of writing.
As per the filing with the Hong Kong Stock Exchange, the firm’s launch of TideBit, a platform for crypto-fiat exchange and TiDeal, which offers the same for crypto to crypto, have helped offset their crypto losses to some extent.
However, as a result of their ill-fated cryptocurrency investments, the firm reported a net loss for the six-month period, to $6.3 million.
Global Energy Resources is not especially well known in its own right, but its chairman, Chen Ping, is a renowned Chinese billionaire and media baron, who also owns Sun TV. Chen personally owns 85% of the TideBit trading platform, and is known to be especially bullish on the future of blockchain technology.
While the early signs might not be the most promising for Global Energy Resources and their rebrand, it remains to be seen whether the firm can balance the risks of engaging in cryptocurrency speculation with the need to satisfy regulators and investors.
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