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Israeli Shelf Company Turned Crypto-Mining Company Plans to List on Toronto Exchange

Quebec-based crypto-coins mining company Backbone Hosting attempted to list on the Tel Aviv Stock Exchange through a merger with a Tel Aviv shelf company before it was blocked by the Israeli securities regulator. Now, the company looks to Toronto and Nasdaq

Reut Shpigelman and Amarelle Wenkert 17:1030.01.18
Blockchain Holdings Ltd., a reincarnation of Israeli shelf company Natural Resources Ltd. and Quebec-based cryptocurrency mining company Backbone Hosting Solutions Ltd., plans to list on the Toronto Stock Exchange within six months, said CEO Roy Sebag, speaking on Tuesday at a press conference in Tel Aviv.

 

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The company also plans to list as an ADR (American Depositary Receipts) issuer on Nasdaq, Mr. Sebag said.
Roy Sebag. Photo: Orel Cohen Roy Sebag. Photo: Orel Cohen

 

In December, the Quebec-based cryptocurrency company announced its intention to list on the Tel Aviv Stock Exchange (TASE) through a merger with the Tel Aviv-based shelf company. In the months before the announcement, Natural Resources submitted a slew of reports to the Tel Aviv Exchange, outlining a planned pivot into cryptocurrency and blockchain. After being dormant for years, In just a couple of months, the company’s stock price shot up over 9,000%.

 

The company’s plans for a Tel Aviv float were short-lived, as the Israeli securities regulator weighed in. On January 4, the Israeli securities authority said it will move to bar cryptocurrency-related companies from trading on the Exchange unless they have $30 million (NIS 100 million) in equity and have been active for at least three years.

 

Operating three cryptocurrency mining server farms in industrial facilities in Quebec, Backbone was registered in Canada in July. It started operating in the second half of 2017. Following the announcement a spokesman for Natural Resources, now called Blockchain Mining Ltd., said that while the company would have over $30 million in equity, it is doubtful whether it would be considered as operational for at least three years, as per the suggested regulation.

 

Most stock exchanges around the world have been cautious when it comes to listing cryptocurrency companies. On September, Canadian cryptocurrency mining company Hive Blockchain Technologies Ltd. began trading on the Toronto Stock Exchange.

 

“By July of this year, the company is expected to be traded on the Toronto Exchange, as well as an ADR on Nasdaq,” Mr. Sebag said at the press conference. “There are just a few more technicalities to complete,” He said. “We have received preliminary approval.” Mr. Sebag holds a 51% stake in Blockchain Holdings.

 

According to Mr. Sebag, Blockchain Holdings saw revenues of $3 million in November, $7.6 million in December, and $7.3 million so far in January.

Mr. Sebag said that the company saw a growth in revenue in January despite the sharp drop in bitcoin prices, and added that Blockchain Holdings is mining a variety of virtual coins, including ethereum, bitcoin, and dash.

 

“We invest in blockchain technology,” Mr. Sebag said. “There is an entire ecosystem of uses and applications in this market, just like the ecosystem of the internet.”
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