Blockchain company DLTx ASA announced that it will go public via an acquisition with SPAC Blockchain Moon Acquisition Corp. The transaction values Oslo-based DLTx ASA at $163.3 million, or 85x its 2021 revenue and contemplates that the company will re-domicile to the United States and trade on the Nasdaq under the symbol “DLTX” after the transaction closes during the summer 2023.
The deal’s press release describes DLTx as “a vertically integrated technology company developing Web 3 and decentralized transactions by deploying blockchain infrastructure at scale across major global industries,” that is “run by decentralists who believe in the new economy that is powered by cryptographic digital assets.”
The company states that it is “at the forefront of developing and launching of several of the most important protocols in the blockchain space, including Ethereum, developed the first blockchain investment fund in 2014, has built out large-scale mining infrastructure since 2015, and now operates the first publicly traded company focused on powering Web 3.” The company’s cryptocurrency mining operations and blockchain-based commerce systems generated $1.6 million during the first half of 2022 but its losses have accelerated: it lost $5 million during that same period, which is double the company’s rate of loss over 2021.
The company goes public during a difficult period for cryptocurrency, as values have plummeted. Ethereum is down 67% over the past year. An estimated $2 trillion in value has been erased from the crypto markets since the rallies of 2020 and 2021.
Ethereum Price
Source: Google.com
The crypto markets have been rocked by several high-profile hacks over the course of 2022. From the collapse of Luna to North Korean hackers stealing $1 billion worth of crypto – and many other scandals beyond – the crypto ecosystem has been harmed by inherent vulnerabilities in decentralized financial assets.
Amount Stolen from DeFi Protocols
Source: Chainalysis
Bill Gates and Warren Buffet have criticized cryptocurrencies as a Ponzi scheme with no fundamental value, writing “All Ponzi schemes must have a steady stream of new investors to join in, so that the whole scheme can be maintained.” The crypto market faces greater regulatory oversight as well: the SEC is stepping up enforcement actions against crypto companies as it contemplates new rules.
According to Matterhorn’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions, DLTx ASA was advised by law firms Reed Smith LLP and DLA Piper. Blockchain Moon Acquisition Corp. was advised by Kirkland & Ellis LLP and Advokatfirmaet Thommessen AS.