The Huobi Group plans a backdoor IPO after acquiring a controlling stake in Hong Kong-based electronics manufacturer Patronics Holdings, a public listed company on HKEX.

Over the last one month, cryptocurrency exchange Huobi has been flexing its muscles to launch its IPO. The latest filing documents suggest that Hubo is planning for a backdoor entry to the Hong Kong Stock Exchange (HKEX).

The filing dated September 10, mentions Hong Kong-based electronics manufacturer Patronics Holdings Ltd. Huobi acquired this company last August and has renamed it to Huobi Technology Holdings Ltd. Upon its acquisition, Patronics transferred over 220 million shares to the Huobi Group.

In all, as per the shareholding disclosures, the deal was valued at $77 million wherein Huobi got the majority stake in Patronics. Today, Huobi holds a massive 73 percent stake in Patronics. This reverse takeover provided a way and opportunity to Huobi to go public on the Hong Kong Stock Exchange (HKEX).

However, starting next month of October, the HKEX is planning to put stricter regulations for backdoor IPO entries and things might not go ahead for Huobi as expected. In the light of such acquisitions, the HKEX is planning to make changes to the current regulations. Thus, it will make it difficult for companies just to get a majority stake in the public listed company and enter the markets.

After China banned crypto transactions in 2017, Hong Kong has become the hub in Central Asia for crypto companies to establish their base. Huobi is not the first crypto company attempting to go public on the Hong Kong Stock Exchange. Bitmain, the manufacturer of crypto mining devices also planned a similar IPO but faced some regulatory hurdles and decided to call-off the project.

To expand its global footprint, Huobi has been flexing its muscles and making some important acquisitions. Earlier this month, Huobi acquired a controlling stake in a licensed Japanese Crypto exchange BitTrade. BitTrade is officially registered with the Japanese regulator – Financial Services Agency – and is legally carrying out its operations in the country.

During the acquisition, Huobi CFO Chris Lee said:

“Leveraging on Bit Trade’s leadership team and its Japanese government-approved license, this is just the beginning as we look to grow Bit Trade into the most dominant player in the Japanese cryptocurrency market.”

Once the new regulations by HKEX kick-in next month, it remains to be seen how Huobi manages to sail through its plans ahead.