Chinese Freight SaaS Service Provider to List Security Token in the U.S. After Regulatory Issues

Chinese digital software-as-a-service (SaaS) provider HGC Info Tech announced it is launching the Trucpal digital security token later this month, aiming to raise $20 million in funds.

HGC, which serves the freight market in China, is set to list the token on the U.S. digital asset exchange INX in conformity with U.S. Securities laws and regulations as an increasing number of Chinese companies face potential delisting from the U.S. stock market due to auditing rules.

HGC to Bring the First Security Token to the Chinese Freight Market

After recognizing the rapidly-growing demand for blockchain solutions and security tokens, HGC teamed up with blockchain professionals to develop its own security token. Following its offering on INX on July 25, the owner of blockchain-powered SaaS platform Trucpal is set to bring the first security token to the Chinese freight market.

The Xiamen-based SaaS provider believes that China is the most promising freight market in the world, with an annual output of $1.5 trillion in 2020 and an annual transportation volume of more than 52 billion tons last year.

The company believes the security token will allow millions of users on the Trucpal platform to earn financial rewards and facilitate the development of its freight ecosystem. The move also marks the start of a potential long-term partnership with INX, which raised $130 million in 2019 after launching its own security tokens.

“lNX is the leader in issuance and trading services for US compliant digital securities. The cooperation with lNX will greatly help HGC to successfully issue the Trucpal token in compliance with U.S. regulatory requirements.”

Wendong Zhang, Founder of HGC

Zhang added that the token has the potential to significantly advance the HGC system and win the support of millions of users. He believes that the launch of the Trucpal security token could “be a long-term win-win development while creating potential rewards to Trucpal Token investors,” he added.

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Dozens of Chinese Face Delisting From the U.S. Due to Audit Rules

The Trucpal token, slated to launch later this month, was developed in compliance with U.S. Securities laws and regulations as nearly 200 U.S.-listed Chinese companies face delisting rules over auditing rules.

In 2020, the U.S. government introduced the Holding Foreign Companies Accountable Act (“HFCAA”), which requires publicly traded companies in the U.S. to provide access to audit working papers. Companies that refuse to give access would be delisted from U.S. stock exchanges within three years, according to the act.

Earlier this month, US and Chinese have held talks to ease the delisting risks and allow a number of Chinese companies to continue trading on U.S. exchanges. The progress of the negotiations “hinges in part over the scope of redactions in audit work papers of Chinese companies,” according to Bloomberg.

Do you think U.S. and China will come to an agreement over delisting risks? Let us know in the comments below.