Shares in Ebang International Holdings Inc. (Nasdaq: EBON) spiked early Monday but quickly reverted course, trading down 9% as of midday. The Chinese company has just announced the launch of its cryptocurrency exchange in a move investors have anticipated since late 2020.
So, why did the stock drop?
“Qualified investors will be able to register and trade by visiting the official website at www.ebonex.io,” Ebang wrote in its announcement.
Apparently, users in the United States weren’t qualified. When visited from the U.S., Ebang’s cryptocurrency exchange Ebonex turns up an apology:
“We are sorry that EBONEX no longer provides crypto trading in your country/region due to local regulatory requirements for the crypto industry. Thank you for your support and understanding.”
Intraday, the trading volume of EBON shares has surpassed 25.5 million as their worth dropped to $6.40 per share. The disappointment over the exchange’s inaccessibility in the U.S. has overshadowed the investors’ hunger for anything bitcoin-related. BTC approached $58,900 on Monday, slightly down from its mid-March record high of $61,000.
Ebang makes bitcoin mining equipment but calls itself “a blockchain technology company in the global market.” It completed its IPO in New York in June 2020, raising $100.8 million, and raised an additional $70 million in a follow-on public offering deemed closed in February for shares priced at $5 apiece.
In a February statement, Ebang said it will use the capital for “research, development, production and sales of ASICs and equipment related to cryptocurrencies, expansion of its cryptocurrency mining business as well as establishment and operation of cryptocurrency mining farms, and general corporate purposes, which may include working capital needs and other corporate uses.”