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Bitcoin miner Cango has made a major change to its business strategy by finalizing arrangements to sell off its non-crypto businesses in the People’s Republic of China (PRC).
According to the firm’s official announcement, Ursalpha Digital, a British Virgin Islands-incorporated firm, will purchase Cango’s business operations in the PRC.
With an initial payment of roughly US$210.64 million, the sale will have a total cash consideration of nearly US$351.94 million.
Cango’s Move Comes Against The Backdrop of Strict Regulations in PRC
Interestingly, China’s growing governmental pressure on cryptocurrency mining and related industries coincides with the sale of Cango’s PRC company.
Cango’s action is in line with a larger trend of miners looking for more advantageous operating settings, particularly in nations with more readily available renewable energy sources and more transparent regulatory laws.
It is anticipated that this transaction will enable Cango to lower its exposure to regulatory risk in China and take advantage of new prospects in areas where bitcoin mining is permitted.
The change will also enable Cango to better align with industry trends toward sustainability and profitability by optimizing its operational efficiency.
Cango indicates its intention to more skillfully traverse the quickly changing global crypto ecosystem as it completes these agreements.
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PRC Business Disposal Still Subjected to Requirements
Cango’s PRC Business Disposal will not close until a number of requirements are met. First and foremost, the company’s shareholders must approve the deal in an ordinary resolution at a future shareholders meeting.
The business must also finish an internal reorganization to divide its activities in the PRC from those outside of China, such as its mining of Bitcoin and trading of automobiles.
The PRC business and non-China businesses must be kept separate, which requires this reorganization. Nevertheless, neither the fulfillment of all requirements nor the complete approval and completion of the PRC business disposal are guaranteed.
Due to the ambiguity of the closing criteria, the transaction may still encounter difficulties before it is formally completed.
Cango’s Diversification Remains Important For Firm’s Growth
With the sale of its non-crypto businesses in China, Cango completes its full transition into the cryptocurrency space. Cango is putting itself in a position to concentrate solely on cryptocurrency, especially Bitcoin mining, by selling its PRC company.
By making this tactical change, Cango may be able to take the place of bigger Bitcoin mining firms and profit from the rising demand for mining services and infrastructure.
As it looks to forge a more robust presence in areas with more advantageous mining laws and prospects for expansion in the digital asset market, the move also puts Cango in line with the changing global cryptocurrency industry.
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