Last night, 796 Exchange, the earliest domestic Bitcoin exchange involved in Bitcoin futures trading , released an announcement on its official website, announcing the privatization of the platform's shares. 796 Exchange will repurchase all 796 crowdfunding original shares issued in August 2013 at a price of 0.012 BTC/share on March 3 , and the original issue price of these original shares was 0.12 BTC. 796 Exchange officials also stated that this was a decision made out of necessity for the benefit of crowdfunding subscribers . In addition, 796 Exchange also announced in this announcement the three thefts and losses suffered by the platform. The following is the original text of 796 Exchange’s announcement on the privatization of 796xchange-MRI : Announcement on the privatization of 796xchange-MRI 796 Exchange (hereinafter referred to as "796") is a Bitcoin trading platform under 796 Electronic Trading Co., Ltd., which was founded in June 2013. In August of the same year, it crowdfunded and issued BTC stock 796XCHANGE-MRI [implemented in the territory of the People's Republic of China and provided to people with Chinese household registration (excluding Hong Kong, Macao Special Administrative Region and Taiwan)]. In the Bitcoin ecosystem at that time, crowdfunding BTC stocks was an important business method, which originated from the bitcointalk community. GLBSE, BTCT, and Bitfunder were once the leading crowdfunding BTC stock trading stations. 796 had also planned to develop similar businesses, but with the changes in the regulatory environment of virtual currencies in recent years, the once largest BTC virtual stock market websites GLBSE, BTCT and Bitfunder have successively announced their closure. The once most glorious ASICMINER (Baked Cat) stock issuer ran away, and BTC stocks began to fade out of the market. We have also been thinking about how to give existing 796XCHANGE-MRI holders a suitable disposal plan. The entrepreneurial projects that the founder of 796 has managed for 10 years have been established in various industries with integrity. Whether it is product design or exit mechanism, we strive to be fair and honest. Many users have followed us for many years, and they play whatever projects we do, which shows that users highly recognize us. As the BTC futures trading model created by 796 became free in June 2015, we gradually gave up this part of the business. Since then, we have been working hard to innovate and transform. In the second half of 2015, we went through a period of transformation and achieved initial results. Unfortunately, before the Spring Festival, we once again paid a heavy price in terms of network security. Since its inception, 796 has suffered three major thefts, totaling 2,774 BTC. The relevant stolen addresses are as follows:
1023 BTC stolen on July 1, 2014, related address: 1AyB2Ff33WjN8HyFHGa6UnEypDTnexiuVM 1000 BTC was stolen on January 27, 2015, related address: 1CvGkU5WUZR4L6uzHd5UJ6w3dXwVKe2wrU 751 BTC was stolen on December 21, 2015. Related address: 1L7XnPzjS8r86FJtPiEQhvw7LjkWrR5zU These losses are currently being paid for by our founding team. Most of these stolen bitcoins are still unused. We are also offering a reward here. If anyone can help us recover these coins, we will give a 10-30% reward. In fact, every time a problem arises, it can bring about positive changes, and we think it is worth it. Many times, when something bad happens, we can also turn it into a good thing. For example, the last theft prompted us to make up our minds to increase investment in technology research and development again, reorganize the company's management structure, recruit a new technical director with a high salary to form a new technical team to completely reconstruct the system, and separate the functions of the operation team and the technical team to accelerate the upgrade of products. At present, the new system is under closed development and is close to completion. In the new system, we will mainly promote contract transactions with US dollars as margin, reduce the importance of Bitcoin in order to expand the market. With the launch of the new platform, the BTC stock trading module of the original platform will no longer be convenient to retain, but if it is directly stopped from circulation and only over-the-counter transactions are provided, it may cause damage to existing shareholders. How to better dispose of 796XCHANGE-MRI stocks has become more urgent. After many careful discussions, the management of 796 decided to officially start the privatization of 796XCHANGE-MRI. The details are as follows:
1. 796XCHANGE-MRI will stop trading from February 27, 2016. 2. From March 1 to March 2, 2016, we will notify all 796XCHANGE-MRI holders one by one. 3. On March 3, 2016, we will repurchase all 796XCHANGE-MRI at a price of 0.012 BTC/share. The BTC obtained from the repurchase will be credited to the account on the same day and can be withdrawn immediately. 4. For those who do not wish to repurchase and hold more than 5,000 shares, please contact the online customer service to register before March 3, 2016.
Although the privatization price cannot be compared with the 0.12 BTC when we issued the crowdfunding, the closing price of BTC on the week of August 1, 2013 was 577 yuan, and the closing price on February 27, 2016 was 2862 yuan. In terms of RMB, the crowdfunding issue price is 0.12BTC*577=69.12 yuan, and the privatization price is 0.012BTC*2862=34.34 yuan. In the past two years, 796's BTC dividends are 0.01008835BTC*2862=28.87 yuan, and there is also a 0.13LTC dividend. In addition, when the crowdfunding was issued, most of the subscriptions were at a discount price of less than 96%, and the company's operating costs were borne independently by the major shareholders before June 2015. Therefore, compared with the privatization, we still gave a valuation of about 5 million US dollars after not making provision for abnormal losses caused by network security issues. It can be said that we have done our best. As for the crowdfunding proceeds at that time, except for the part realized in MTGOX, they were basically used to repurchase stocks and make up for the system losses caused by the lack of a system allocation in the early days (including more than 2,000 BTC of current operating income), which has been explained in detail in the 2014 annual report. However, we still emphasize again that 796, as a pioneer, pioneered the "system allocation" mechanism, which was a huge price to pay. Before 796 created the "system allocation" mechanism, the price of Bitcoin rose from about 600 yuan in early August 2013 to 8,000 yuan in November, just less than three months. As a high-leverage futures product, the price paid by 796 can be imagined. As for the original intention of repurchasing stocks, it was because the sharp rise in the currency price led to a normal decline in the stock price denominated in BTC and to reduce the selling pressure caused by the 796XCHANGE-MRI given away in the transaction. After all, about 50% of the 796XCHANGE-MRI at that time was obtained through transaction gifts. Compared with crowdfunding subscriptions, these holders were more eager to cash out. The decision was made out of necessity for the interests of crowdfunding subscribers.
Additional notes:
1. 796 currently has no undisclosed matters that should be disclosed. This privatization is entirely for the purpose of providing holders with a suitable termination plan when we are currently capable and the company's operations are relatively stable.
2. 796 has no intention of accepting any type of venture capital and has no overall sale or other capital operation plans. This privatization decision is not made to attract new investors.
3. The current stock of 796 users is about 2,000 BTC, and we have 100% reserve. If necessary, we can collect and publicize it. In addition, the reserve for product hedging is nearly 2 million US dollars (borrowed by major shareholders).
Thank you to all holders for your participation, support and understanding over the past two years. Please believe that we are always working hard.
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