In one of the biggest deals in the crypto ecosystem, South Korea’s largest cryptocurrency exchange Bithumb has sold more than 38% of its total ownership to BK Global Consortium, a blockchain consortium based in Singapore, for 400 billion won, or $350 million.
Even though the talks about the deal has been surfacing for a pretty long time, it wasn’t until today that Bithumb confirmed the proceeding. The deal will be finalized on December 12 with Korean shareholders.
The consortium set the value of Bithumb at more than $1.8bn, coupled with the management rights premium. That valuation is much higher than the earlier estimated value of about $1bn in existing markets. BK Global Consortium has decided to buy shares from 10 shareholders.
Kim Byung-gun, a plastic surgeon and also the chairman of BK Group, formerly the fifth largest shareholder, will become the largest Korean shareholder through this agreement. Kim is also an early cryptocurrency investor, who founded an initial coin offering (ICO) consulting firm and ICO platform in Singapore last August.
A representative of the consortium said,
“Kim Byung-gun demonstrated his multinational management ability in the field of medical care, fintech, and blockchain in Singapore. He is the right person to pursue the systemization and globalization of the virtual currency exchange.”
The news follows a rough quarter for Bithumb. The exchange was hacked which resulted in $40 million in losses. They suspended new account openings due to a bank contract issue which significantly dropped the trading volume.
Signs Of Change
Kim has already announced that he plans to open ‘Bithumb Dex’ through his Hong Kong subsidiary this month. It is a decentralized exchange. This will enable users around the world to send and receive virtual currency more smoothly. Also, the existing problem of hacking, especially apparent in Korean exchanges, can likely be solved on a Dex.
The change of management at Bithumb could be an occasion for the Asian blockchain industry to gain momentum. A BK Global Consortium official said, “E-commerce companies such as Amazon and Alibaba are receiving large commission fees, which have become an issue for consumers. Blockchain payment systems can reduce those commission fees.” Notably,mid-tier commissions could be reduced to 0% if a federation of companies held by BK Consortium is created. This would create a competitive advantage over existing e-commerce companies.