Top Chinese bitcoin exchange shuts down

Above, a physical bitcoin from Chinese bitcoin exchange BTCC. (Courtesy BTCC)
Updated 14 September 2017
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Top Chinese bitcoin exchange shuts down

BEIJING: One of the biggest bitcoin exchanges in China and the world announced Thursday that it would stop all trading following new Chinese government regulations clamping down on crypto-currencies.
The international value of bitcoin has plunged in recent days amid speculation that the Chinese authorities will shut down the trading platforms following last week’s ban on initial coin offerings.
BTCC – China’s second bitcoin platform in terms of volume and the world’s third largest – said on its Twitter account that “after carefully considering” the announcement by Chinese regulators, it will “stop all trading” on September 30.
The Chinese central bank’s announcement last week meant that Chinese firms would no longer be able to issue electronic currency units to raise funds.
Following the decision, the National Internet Finance Association of China said Wednesday that there was “no legal basis for platforms which engage in the trading of various forms of ‘virtual currencies’”.
The association, which was created by the central bank, warned on its website that such currencies are “increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising”.
The crypto-currency sank late Thursday.
According to the Bitcoin Price Index, which offers an average of the various global platforms, the currency had plunged as low as $3,640 by Thursday evening after peaking at an all-time high of around $4,359 on Tuesday.
The Chinese central bank’s move last week was seen as a way for Beijing to gain control over crypto-currencies, which are created using blockchain technology and are sold and bought online without any government regulation.
In an attempt to halt capital flight overseas and clean up its financial system, Beijing began early this year to tighten controls on bitcoin trading platforms by restricting, in particular, transactions considered excessively speculative.
The two main Chinese platforms, BTCC and Okcoin which operate in yuan, account for 22 percent of the world trade in bitcoins, according to reference website bitcoinity.org.


Uber buys rival Careem in $3.1bn deal to dominate ride-hailing in Middle East

Updated 26 March 2019
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Uber buys rival Careem in $3.1bn deal to dominate ride-hailing in Middle East

  • The $3.1 billion cash-and-stock purchase buys out all outside Careem investors
  • The agreement is subject to regulatory approval, including by antitrust officials in the countries where Careem operates

SAN FRANCISCO: Global ride-hailing firm Uber Technologies will spend $3.1 billion to acquire Middle East rival Careem, buying dominance in a competitive region ahead of a hotly anticipated initial public offering.

Uber said late Monday night it would pay $1.4 billion in cash and $1.7 billion in convertible notes in a deal that gives it full ownership of Careem. The long-expected agreement ends more than nine months of start-and-stop negotiations between the two companies and hands Uber a much-needed victory after a series of overseas divestments.

The notes will be convertible into Uber shares at a price equal to $55 apiece, Uber said, marking about a nearly 13 percent increase over Uber’s share price in its last financing round, led by SoftBank Group Corp. more than a year ago.

The acquisition makes Careem a wholly owned subsidiary of Uber and will keep the Careem brand and app intact, at least initially. Careem co-founders Mudassir Sheikha, Magnus Olsson and Abdulla Elyas are staying on with Careem following the acquisition, the companies said.

However, Careem’s board will be overhauled, with three seats going to Uber representatives and two belonging to Careem. Sheikha, who is Careem’s CEO, and Olsson will have board seats. An Uber spokesman declined to say whom Uber would appoint to the board.

The $3.1 billion cash-and-stock purchase buys out all outside Careem investors, the companies said, and Careem stock will be converted into Uber equity. Careem had raised less than $800 million from investors and as of October had a $2 billion valuation. Its backers include German car maker Daimler, Chinese ride-hailing company Didi Chuxing, Japanese Internet company Rakuten Inc. and Saudi investor Kingdom Holding.

Saudi-based Al Tayyar Travel Group, an early investor with an estimated stake of 20.9 percent, stands to make $475 million in profit from the deal

 

 

The deal is expected to close in the first quarter of 2020, the companies said, meaning it will not be reflected in Uber’s first couple of quarterly earnings releases as a public company, although it will likely be disclosed in a public IPO filing. Uber will kick of its IPO next month and is expected to receive a valuation of at least $100 billion.

The agreement is subject to regulatory approval, including by antitrust officials in the countries where Careem operates, which could prevent the deal from moving forward or compel the companies to modify the terms.

The deal is particularly important for Uber, whose ability to be a competitive global ride-hailing player had come into question after it sold its operations in China, Russia and Southeast Asia to local rivals after sustaining heavy losses.

Uber Chief Executive Dara Khosrowshahi in a statement called the deal with Careem “an important moment for Uber.”

Uber has been eager to reach an agreement before the company begins its “roadshow,” when it will meet with public market investors prior to listing shares on the New York Stock Exchange. The deal enables Uber to claim dominance in a growing region for ride-hailing outside of the United States.

Uber operates in more than 70 countries, but faces strong rivals in Latin America and India, and tough regulations in Europe.

Talks between the companies had dragged on since at least last summer, sources told Reuters, although they did not get serious until the end of the year. The companies had for years battled in a competition for drivers and riders that had required discounts and subsidies and pushed prices artificially low.

Careem over the course of last year grew its business rapidly, including adding a delivery service, and went on to nearly double its valuation, pressuring Uber to increase its bidding price.

Toward the end of last year, Careem was entertaining interest from investors for another financing round when Uber moved aggressively to buy the company outright, sources said.

Careem, founded in 2012, has a larger presence than Uber in the Middle East, North Africa, Pakistan, and Turkey, operating in 98 cities there compared with Uber’s roughly 23 locations.

“An Uber-Careem merger underscores the huge potential of car-hailing in the Middle East,” said Sam Blatteis, CEO at the MENA Catalysts, a Middle East public policy advisory and research firm.

The merger also follows the $580 million acquisition of Dubai-based ecommerce company Souq Group by Amazon.com Inc. in 2017, according to a US Securities and Exchange Commission filing, spotlighting the Middle East’s budding technology scene. “It’s the first ‘unicorn’ exit in the Middle East, and it’s representative of things to come out of the Middle East,” said David Chao, co-founder and general partner at venture firm DCM and a Careem investor, referring to start-ups valued at $1 billion or more.

Uber said its revenue last year was $11.3 billion, while its gross bookings from rides were $50 billion. But the company lost a staggering $3.3 billion, excluding gains from the sale of its overseas business units in Russia and Southeast Asia.

Careem does not disclose its earnings.