In brief
- The group said the program aims to diversify its business, believing it would serve as a bridge between crypto and the NYSE.
- AMTD plans to use their media, hospitality, and education assets to offer asset-allocation support, VIP experiences, and financial education.
- All three are micro to small-cap companies, with the largest running at about $509 million.
On Tuesday, three affiliated NYSE-listed companies under AMTD Group proposed a crypto-for-stock conversion program that would let holders swap Bitcoin, Ethereum, USDT, Binance’s BNB, and USDC for newly issued shares under the exchange.
AMTD IDEA (AMTD), AMTD Digital (HKD), and The Generation Essentials Group (TGE) formed the program with pricing that would be set by mutual agreement at prevailing market values, and allocations could be split across the three issuers.
Framing the plan as a “conduit and effective means” for portfolio diversification, the group said the issuances would “serve as a bridge connecting the world of crypto assets with one of the world’s leading stock exchanges.”
To flesh out what it touts as “adjacent offerings,” the group points to its media, hospitality, and education footprint as the delivery base.
Headquartered in France with presence in Singapore, AMTD runs digital media, marketing, investments, and hospitality/VIP services, while TGE owns L’Officiel, a French fashion magazine, and The Art Newspaper. It also operates entertainment projects and premium properties.
The group claims these assets will be used to help crypto holders “facilitate and better their experiences,” packaging asset-allocation support, leisure, and VIP experiences, as well as financial education.
The proposal also includes American depositary shares, which are U.S.-traded shares issued by a depositary bank that represent a specified number of a foreign issuer's ordinary shares, among the securities that could be issued to crypto holders looking to convert their assets.
This kind of trade “could be considered a private placement or exchange deal,” Summer Hyejin Park, founder and CEO of impact startup Biyard, told Decrypt.
“In equity markets, there’s an investment vehicle designed to allow investors to subscribe to new shares by injecting assets instead of fiat cash,” she added. Yet to bring it to life, Park acknowledged how there are “numerous hurdles to overcome,” making its rollout across other jurisdictions tenuous. Still, on the legal end, there is “a path forward,” Pauline Shangett, chief strategy officer at crypto exchange ChangeNOW, told Decrypt.
“U.S. rules allow non-cash consideration for stock, but it’s complex, costly, and requires very strict disclosures and SEC approvals.” For investors, the setup “could shake up trading dynamics,” Shangett said, noting that some could end up “treating shares like a quick trade rather than a long-term investment.”
While there is “a legally compliant pathway for public issuers to accept non-cash consideration like crypto for stock, the onus should be firmly on the individual investor to do their own research,” Simon Bowles, head tutor at the University of Oxford’s blockchain strategy program, told Decrypt.
It’s worth noting that, by market capitalization size, the three are micro to small-cap issuers. AMTD has about $176 million, HKD has roughly $509 million, and TGE has $161 million in market size, per their respective data dashboards on Google Finance.
Of the three, only AMTD's stock closed positively at 1.9%, with the other two down by 3.5% and 6.2% respectively, following the announcement.
The announcement disclosed no launch timeline, geography, investor eligibility, issuance caps, lockups, KYC or custody arrangements, or settlement mechanics, and stated it was not an offer or solicitation.
Decrypt reached out to the group for comment on whether the issuances would be registered, conducted as private placements, or offshore transactions, and whether U.S. persons would be eligible.
Editor's note: This story has been updated with additional comments from outside sources.