Crypto company Byte Power still looks no closer to getting its ASX ban lifted
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It’s been a wild few months for Byte Power, a colourful outfit listed on the ASX whose operations include a fledgling cryptocurrency exchange.
The company got hit with a $33,000 fine from corporate regulator ASIC in December for a breach of disclosure rules.
Byte (ASX: BPG) disputed the accusation, but announced to the ASX this morning that it’s coughed up and paid the penalty.
However, the company’s directors said the payment was “not an admission of liability”.
In addition, the payment “cannot be regarded as a finding” that Byte breached its continuous disclosure obligations under the Corporations Act.
That said, the ASX still won’t lift the suspension on BPG shares, which has been in place since 2017. And Byte wants answers.
In a separate statement this morning, the company said it has “sought confirmation” from the exchange about when it can be let back on; and if not, what it has to do to get the suspension lifted.
Crazy cash flows
Byte’s efforts to get reinstated haven’t been helped by ongoing concerns about its solvency as a business.
And a review of the company’s recent 4C filings — which it submits monthly — reveal some odd-looking numbers.
For one thing, Byte received $275,000 in November as part of a settlement with Singapore-based Soar Labs. According to the AFR, the settlement was paid in Ripple cryptocurrency which Byte said it then sold off for cash.
That left the company with year-to-date proceeds of $492k, and it received another $21k in December.
It also moved $411k which it previously described as “proceeds from borrowings” into the same line-item as its Soar settlement.
Possibly an administrative error, but a little strange all the same. Stockhead has asked Byte’s chief financial officer for comment.
Those borrowings most likely acted as a short-term lifeline for the company, after its cash pile fell to just $18k in October.
The December numbers show it paid $300k off the loan amount.
And December looked like a better month operationally, as the company booked $126k from customers after making $0 in November.
If you can follow all that, the wash-up is that Byte says it had $141k in the bank as at December 31, down from $340k the previous month.
Of the $126k in receipts, none of it would have come from the company’s Byte Power X crypto exchange, which only commenced trading in mid-January.
According to Byte, the exchange is now operating with a limited number of trading pairs, including Bitcoin to Australian dollars (BTC/AUD).
As part of its exchange operations, the company has also issued what it called “loyalty tokens”. Traders on Byte’s platform who use the tokens will be eligible for a discount on trading fees.
But as far as Byte being let back on the ASX goes, those tokens are most likely holding up the show.
Currently, the Byte Power X tokens are the subject of an ASIC investigation as to their legality.
In a response to the company on 30 January, the ASX said it “still has concerns about BPG’s operation of its cryptocurrency exchange, BPG’s disclosure around the development of its cryptocurrency exchange and the legal status of the BPX loyalty tokens”.
For now, Byte says it will continue to work with the ASX on all matters of concern until its shares are successfully reinstated.