Australian multi-service bitcoin company digitalBTC will make history today as the first cryptocurrency-focused company to trade on a major mainstream stock exchange.
DigitalBTC, which began as a mining operation but also engages in bitcoin trading and is developing retail and consumer applications, debuted on the Australian Securities Exchange (ASX) this morning as Digital CC Limited (trading as digitalBTC; ASX code: DCC).
The ASX has a daily turnover of over AUD$4.6bn (US$4.32bn) and a market cap of around AUD$1.6tn.
Credibility rewards
The company views its new listing as crucial to building trust in a consumer bitcoin firm. Trust is a huge issue in the bitcoin world, and scandals involving some of its biggest names were seen as a turn-off for investors outside the bitcoin realm.
Legal requirements for the listing will make digitalBTC “the most transparent bitcoin company around”, according to a spokesperson.
The listing opens doors to a different breed of investor than might normally put money into a bitcoin company: more risk-averse individual and institutional investors and, digitalBTC hopes, those with a lot more money to invest.
The path to listing
DigitalBTC has technically been listed on the ASX since its ‘reverse takeover’ and transformation of Macro Energy Limited back in March, but has pursued the extra legitimacy of its own listing since then, which required approval.
Its backers at the time, consisting of “institutions and high net worth people”, committed AUD$9.1m (US$8.55m) to the deal at an effective price of $0.20 per share.
Since then, digitalBTC’s mining operations have earned over 5,100 BTC and its established trading desk revenues had returns of 34% in May, up from 31% in April.
Final approval
The reverse takeover meant that Macro Energy officially acquired digitalBTC, giving the company a faster track to the exchange listing. Investors could buy shares in Macro, but the digitalBTC name was necessary to indicate the company’s true business and gain value.
Trading has been suspended for the past three weeks while an ASX listing officer reviewed and approved the final paperwork, which is now complete.
The company has also lodged a prospectus with the Australian Securities and Investments Commission (ASIC).
Bitcoin vs ‘real’ exchanges
Observers will be keen to see what happens to digitalBTC’s share price. Most bitcoin startups, where listed, trade on bitcoin-only and ‘unofficial’ stock exchanges, which operate in a regulatory grey area.
Just last week, SatoshiDICE and FeedZeBirds founder Erik Voorhees was fined $35,000 and forced to relinquish profits of almost $16,000 resulting from his offering of securities in the two firms.
Uncertainty surrounding crytpocurrency exchange listings is likely keeping mainstream investors at bay, at least until rules are properly clarified.
Reporting requirements
A major stock exchange listing also brings with it a raft of extra reporting and transparency requirements hitherto unknown to the bitcoin world. Among them are quarterly cashflow reports and six-monthly audited accounts, and should any legally-defined ‘material’ issue arise, it must be disclosed immediately.
DigitalBTC founder and now Executive Chairman, Mr Zhenya Tsvetnenko, said he was very pleased with the extensive progress made between March and finalizing the official launch today.
“We’ve made a great start for digitalBTC, aggressively expanding our early bitcoin-focused operations, for some very good results. So much so that we are now one of the largest bitcoin miners in the world,” he said.
“What we really look forward to now is the success we can generate from development of our bitcoin retail consumer product line, as digital currencies such as bitcoin continue their explosive growth. Our successful early operation’s growth positions us well to support our future development activities in the digital currency sector, and I look forward to the updates we can bring shareholders and the market in the coming months.”
DigitalBTC also has a hardware partnership with BitFury, which recently announced a $20m funding round of its own.
Bitcoin’s march in Australia
Bitcoin and similar currencies are well on the way to mainstream acceptance in Australia, both at a corporate and official level.
Australian digital currency businesses also recently launched the The Australian Digital Currency Commerce Association (ADCCA), a body intended to function as a professional chamber of commerce for any companies involved in bitcoin either directly or indirectly, including bitcoin-using merchants and potentially even banks.
It would work in partnership with broader advocacy groups for bitcoin itself, like the Bitcoin Foundation-affiliated Bitcoin Association of Australia.
Tax rules
The Australian Tax Office (ATO) has also announced its intention to release official taxation guidelines for bitcoin businesses and investors, probably before the end of the current Australian financial year on 30th June.
Although the local Bitcoin Association has published its own recommendations in anticipation, the ATO has not yet revealed its policy.
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