As cryptocurrency gains increasing popularity, more listed companies are utilizing digital currencies to complete equity financing. On December 21st, U.S.-listed company 500.com announced a strategic move: issuing 85,572,963 Class A ordinary shares to Lucky Information Technology Co., Ltd. ("Lucky Info") for approximately $23 million.
Notably, this funding round allows payment in USD cash or cryptocurrencies (including Bitcoin), with the final payment method to be determined within a month.
Strategic Expansion into Blockchain Infrastructure
Lucky Info is controlled by Luo Wenxin, founder of 500.com and current minority shareholder (<5%). Post-transaction, Lucky Info will hold 16.6% of 500.com's ordinary shares—a move signaling deeper cryptocurrency ecosystem involvement.
Originally China's leading online lottery platform (peaking at ¥7B annual sales), 500.com pivoted after 2015 regulatory suspensions. Its 2017 acquisition of Hong Kong-listed Lotto Interactive marked a strategic shift:
- Bitcoin Mining Leadership: Lotto Interactive operates three hydro-powered blockchain data centers, achieving 6.27% of Bitcoin’s global hashrate by September 2020.
- Sustainable Energy Model: Leveraging seasonal hydropower surpluses ("abandoned electricity") from Sichuan/Yunnan provinces during flood seasons (May-October), reducing energy waste while cutting mining costs by ~60%.
Financial Validation and Growth
Lotto Interactive’s Q3 2020 report demonstrated this model’s viability:
- Revenue: HK$153M (99% from data center services)
- 9-month revenue surged 10x YoY to HK$283M
- Gross profit rose 273.9% to HK$34.8M
Leadership and Future Roadmap
500.com appointed Yang Xianfeng as CEO—a blockchain veteran overseeing Lotto Interactive’s operations. His role as Chairman of Sichuan Changhe Hydroelectric Blockchain Data Industrial Park suggests potential expansion into:
- Blockchain Big Data Applications: Enhancing supply chain traceability and IoT integrations
- Renewable Energy Partnerships: Scaling hydro-cooled mining facilities
- DeFi Ecosystem Development: Exploring tokenized financial services
Industry analysts highlight Yang’s appointment as pivotal for 500.com’s cryptocurrency vertical integration, potentially positioning it as a bridge between traditional finance and decentralized technologies.
FAQs
Q: Why did 500.com shift from lottery to cryptocurrency?
A: Regulatory constraints on online lottery prompted diversification. Blockchain's growth potential aligned with their tech expertise and capital flexibility.
Q: How does hydro-powered mining benefit 500.com?
A: It reduces operational costs while meeting ESG criteria—key for institutional crypto adoption. 👉 Learn about sustainable crypto mining
Q: What’s next for 500.com’s blockchain strategy?
A: Expect R&D in smart contracts and enterprise blockchain solutions, possibly through partnerships with Asian fintech firms.