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Hong Kong Stock Exchange Suspends Trading of Cryptocurrency Firm Golden Token’s Share

The Stock Exchange of Hong Kong has halted trading of a cryptocurrency firm’s stock on March 22 due to questions about the company’s financial difficulties.

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Global Token Limited(8192.HK), known until August 2018 as Global Energy Resources International Group, has been publicly traded on the Growth Enterprise Market (GEM), the second board of the Hong Kong stock market, tailored towards small and medium-sized companies that have yet to post a profit, since 2002. It mainly principally engaged in trading businesses regarding energy-saving products before making significant inroads in crypto investments in January 2018 amid the crypto hysteria .

As announced by the company on January 26,2018, it poured 18 ETH ( about HK $150,000 at the time) into a little-known crypto project known as Crebit, and received 117,000 CBT token in return. On March 14, Global Token disclosed that it has acquired an aggregate of  3235.37 ETH in the open market for approximately HK $19.397 million. On September 21, one of its wholly owned subsidiaries purchased 22,270,529.54 XPA tokens with HK$11,131,000 and invested HK$8,069,000 in purchasing 1749.88 more ETH. Since them , XPA and ETH were held by the Group as investments.

According to the Q3 financial report disclosed by the firm on November 14, 2018, at the end of September, the firm had an aggregate of approximately 2,400 ETH and and 22.2 million XPA. Besides, Global Token has reportedly launched a fiat-to-crypto exchange called TideBit and a crypto-to-crypto platform named TiDeal.

As the crypto hype cools down, the crypto crash delivers a hard blow to the company. XPA is ‘dead’ and ETH price falls more than 80% from its all-time high.

Global Token’s cryptocurrency business and a company name change fail to revive its flagging fortunes and bolster the share price. Data shows the share price of Global Token has plunged roughly 90% over the past year, falling from HK$ 0.377 in January 2018 to the current price of HK $0.02.

Worse still, the company faces daunting financial difficulties. It gave a profit warning on March 15, saying it’s expect that the company will record a significant increase in loss for 2018 as compared to the loss of approximately HK$57.6 million for the year ended 31 December 2017.

According to a statement released by Global Token on March 24, the Hong Kong Stock Exchange considered the circumstances of the company to be an extreme case which warrants a trading suspension of the its shares under the GEM Listing Rule by giving five reasons, thus placing its shares in a trading halt.

“The operation of the company’s assets has not generated sufficient revenue and profits to ensure it to operate a viable and sustainable business. Nor has Golden Token demonstrated that its assets would enable it to substantially improve its operations and financial performance,”the Stock Exchange said in a letter to the company.

The company is required to re-comply with the GEM Listing rules and granted a remedial period of 12 months. If Global Token fails to do so by the 21 March 2020, the Stock Exchange will delist the company.

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