Alcoholic Company Madison Buys Hong Kong Crypto Miner

Madison Group takes majority stake in a mining center for USD 60 million.

by Marin Marinov
01 May • 3.5 min
In Mining

Diginex Limited has sold 51% of its mining center in Hong Kong USD 60 million to alcoholic company Madison Holdings Group, Diginex announced on Friday.

In addition to Diginex’ mining and high performance computing (HPC) division, the deal includes enabling the users of Diginex’ proprietary platform DigiAssets to purchase wines, whiskey and other Madison products.

The players

T Madison Holdings Group, is a multinational alcoholic retailer, registered in the Cayman Islands but operating from Hong Kong. The company is listed on the Hong Kong exchange HKEX.

The holding company, mainly involved in wine distribution, entered the crypto world last year when it bought a 20% stake in Japanese Bitcoin exchange and payment’ system BITPoint. Madison reported a loss of USD 726 200 for the last quarter of 2017.

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Diginex Limited, is a specialized multinational crypto company. It is headquartered in Hong Kong and invests in cryptocurrency mining, Distributed Ledger Technology (DLT), mainly blockchain, and advises Initial Coin Offerings (ICOs).

Diginex started cryptocurrency mining in December 2017 by launchings 2 000 mining rigs in Asia and one month later expanded to Europe with 200 centers. The company’ mining strategy is built on a “short term expected profitability”:

“This cash injection [from the deal with Madison Holding] allows us to expedite our steps towards becoming the global provider of Distributed Ledger Technologies. We will continue to build out our mining operations in Sweden and Switzerland, but also focus on helping corporates and governments across the world to implement transformative DLT applications,” Miles Pelham, Diginex`chief executive officer (CEO), said in a statement.

The company also wants to launch a cryptocurrency exchange in Japan but it is currently not clear how regulatory activity in the country will impact the plan.

Crypto regulation in Asia-Pacific

The deal between Diginex and Madison comes amid vivid regulation activity in the Asia-Pacific region and China`s ban on cryptocurrency trading.

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Chinese government actions have no direct impact on Hong Kong, which has an independent financial system, laws and regulation.

The Hong Kong Securities and Futures Commission (SFC) has issued several warnings about high risk in crypto investments. Regarding the mining process, in February SFC took regulatory action against seven exchanges because they had offered ICO tokens without a license. Hong Kong defines cryptocurrencies as “virtual commodities” and ICO tokens as “securities”: Japan was the first country to adopt crypto exchange regulations and became virtual currency trading hub last year. However, following the USD 530 million Coincheck hack in January, the Japanese financial regulator (FSA) initiated inspections of crypto exchanges and ordered seven of them to make security improvements, which prompted one of the leading players Binance and OKEx to reconsider their activity in the country.