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South Korea’s Largest Bitcoin Exchange May Go Public on US Stock Market, Will Anyone Care?



bithumb bitcoin crypto exchange south korea
US buyers would possibly quickly have the ability to acquire stocks within the corporate that owns South Korean bitcoin trade Bithumb. But must they? | Source: REUTERS/Kim Hong-Ji/File Photo

By US buyers would possibly quickly have the ability to spend money on one of the most global’s greatest bitcoin exchanges following its list at the over the counter (OTC) US inventory marketplace.

No, Silicon Valley darling and cryptocurrency unicorn Coinbase hasn’t made up our minds to move public, however Bithumb — the most important bitcoin trade in South Korea and one of the most global’s highest-volume crypto buying and selling platforms — may just quickly in finding its stocks to be had to retail and institutional buyers alike, albeit in a nontraditional method.

Bithumb Will Use Reverse Merger to List Shares in US

According to documents filed with the Securities and Exchange Commission (SEC), US maintaining corporate Blockchain Industries has signed a “binding letter of intent” to merge with BTHMB, the Singaporean corporate that controls Bithumb.

From the announcement:

On January 16, 2019, Blockchain Industries, Inc. (the “Company”) entered right into a binding letter of intent (the “Letter of Intent”) with BTHMB Holdings Pte. Ltd., a Singapore company (“BTHMB”). The Letter of Intent supplies that the Company and BTHMB will negotiate the phrases of a undeniable inventory acquire wherein the Seller shall promote that sure choice of stocks of the Company’s Common Stock (the “Sale Shares”) representing an ideal majority of the Company’s remarkable stocks of Common Stock. At the consummation of the transaction, the Company shall turn out to be a subsidiary of BTHMB.

South Korea bitcoin cryptocurrency
The proposed opposite merge would permit US buyers to buy stocks within the corporate at the back of South Korea’s maximum outstanding cryptocurrency trade. | Source: Shutterstock

The transfer will see the brand new entity — dubbed Blockchain Exchange Alliance (BXA) — indexed on an OTC marketplace in the USA, the place its stocks shall be publicly-quoted. In quick, Bithumb will use the “reverse merger” to move public with much less scrutiny and purple tape than accompanies an strange public list, a lot because the Mike Novogratz-led Galaxy Digital did in Canada.

“We are thrilled to be part of this important initiative that is expected to bring liquidity, accessibility and expansion to the blockchain industry,” stated Patrick Moynihan, CEO of Blockchain Industries. “By working with BXA, we expect to bring more advanced technology and better compliance practices into the public marketplace via a consolidated focus.”

“BXA is a global exchange alliance and the United States is a key factor to any global initiative,” stated Byung Gun Kim, CEO of BXA.

By unifying our companies, we have the benefit of the centered experience of Blockchain Industries. As a end result, we have now super expansion alternatives on this area, and we predict high quality effects from this in North America.

It’s now not transparent how a lot BXA stocks shall be value after they start buying and selling at the OTC marketplace. Last October, Kim’s corporate purchased a 50 p.c plus one stake in Bithumb for round $350 million. Since then, the bitcoin worth has declined any other 45 p.c, despite the fact that international buying and selling volumes have noticed a reasonable uptick.

Bithumb Wanted to IPO But Didn’t Want to Wait


Per nameless assets cited through CNBC, Bithumb had sought after to carry a standard preliminary public providing (IPO) in Singapore however used to be too impatient to attend the only or two years the list procedure would take.

The opposite merger, against this, will give you the corporate with instant liquidity within the OTC marketplace, in addition to the chance, sooner or later, to meet the necessities important to checklist its stocks at the New York Stock Exchange (NYSE) or Nasdaq.

However, regulators will have severe questions on Blockchain Exchange Alliance’s plans to permit US retail buyers to spend money on Bithumb, for the reason that the South Korean buying and selling platform used to be one among a lot of exchanges to endure hack-related thefts in 2018. Though the $31 million in stolen funds used to be rather minor in comparison to the $530 million hack suffered through Coincheck, Bithumb’s June 2018 breach raised questions on its safety insurance policies.

Bithumb has additionally confronted allegations of inflating its reported buying and selling volumes. Last December, a analysis company referred to as CryptoExchangeRanks printed a document concluding that the company’s reported volumes are extremely abnormal, with an strangely huge choice of trades clustering round the similar period of time on a daily basis.

Bitcoin Exchanges Finally Feel Pinch of Bear Market

bitcoin price
Cryptocurrency exchanges, as soon as impervious to the bitcoin worth decline, have begun to sweat slightly in 2019.

Exchanges have been the section of the cryptocurrency business that gave the impression maximum impervious to the endure marketplace since they may earn cash whether or not the bitcoin worth used to be going up or down. However, the length of the downturn has led to day by day buying and selling volumes to plunge, forcing even crypto exchanges to suppose extra sparsely about their backside traces.

On Tuesday, CCN reported that Huobi — any other of the sector’s greatest bitcoin exchanges — had showed that it had laid off round 100 workers as declining buying and selling volumes threatened benefit margins. CEO Weng Xiaoqi wired that the corporate stays successful at the moment however stated that he doesn’t “know how long the bear market will last, so it is still possible that we will struggle to survive.” Huobi, he stated, should “plan in advance and spend money carefully.”

Nexon Deal Would Net Tencent Two Crypto Exchanges

tencent nexon nxc bitcoin exchange
Chinese gaming large Tencent may just achieve Nexon, which owns more than one bitcoin exchanges. | Source: REUTERS/Kim Kyung-Hoon/File Photo

Notably, Bithumb isn’t the one cryptocurrency trade whose mother or father corporate’s stocks may just quickly be to be had to US buyers.

As CCN reported, Chinese tech conglomerate Tencent is actively bearing in mind a bid for NXC Corp., the South Korean maintaining corporate that controls Asian gaming large Nexon. Through its subsidiaries, NXC owns majority stakes in two cryptocurrency exchanges, the Korea-based Upbit and European buying and selling platform Bitstamp, which could also be the sector’s oldest bitcoin trade.

Those exchanges would contain a minuscule portion of Tencent’s just about $400 billion valuation, however the attainable acquire would nonetheless supply buyers with low-risk publicity to the cryptocurrency business.

Do Investors Still Want to Invest in a Crypto Exchange?

Given the hype surrounding Long Blockchain, Riot Blockchain, and different public corporations that made doubtful blockchain rebrands in overdue 2017, the document {that a} primary cryptocurrency trade used to be going public in the USA would have set the marketplace on hearth all through the ancient crypto bull run, possibly sporting the bitcoin price even additional then its present all-time top close to $20,000.

However, 13 months into Crypto Winter, is somebody even going to care?

Featured Image from REUTERS / Kim Hong-Ji. Price Charts from TradingView.

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