Wine Retailer Madison To Acquire Stake In Japanese Crypto Trading Platform BitOcean

News | December 27, 2018 By:

Madison Lab, a subsidiary of Hong Kong Stock Exchange-listed wine firm Madison, is planning to buy a majority stake in BitOcean, a Japanese cryptocurrency trading platform.

Bitocean is registered as a crypto exchange with Japan’s Financial Services Agency (FSA), but has not commenced trading yet. The company also makes bitcoin automated teller machines (BTM).

According to a filing to the secondary board of the Hong Kong Stock Exchange earlier this month, Madison Lab is going to acquire 67.2 percent of BitOcean from independent third parties for 1.68 billion yen ($15.12M USD), and another $15 million in various fees.

Raymond Ting Pang-wan, chairman of Madison, said that the company decided to purchase a stake in BitOcean because crypto trading is active in Japan, and the country has a comprehensive regulatory system in place.

“Japan represents about 20 percent of bitcoin trading worldwide,” said Pang-wan. “Japan and the US are the only two markets that have a licensing system for such trading platforms. We wanted to invest in a platform that was under proper regulation.”

In addition, HDR Cadenza Management, the parent company of major crypto trading platform BitMEX, is also in talks with Madison Lab to create a joint venture. HDR Cadenza Management is considering acquiring a 51% stake of Madison Labs, at a cost of $17.14 million.

Pang-wan said that the Bitocean deal is part of Madison’s diversification strategy, and the collaboration with BitMEX would help it develop its cryptocurrency trading platform.

“Our wine business is stable and profitable, but then it is small. It is hard to make wine trading into a very big business,” Pang-wan said. “This is why we have to diversify into financial technology and the cryptocurrency business – to achieve a better return for our shareholders. Virtual currencies and blockchain are getting more popular. Investing in the virtual currency sector will expand our income source.”