South Korean Crypto Exchange, Bithumb, Is Back on the Market for $430 Million
- Bithumb crypto exchange is back on the market.
- This follows a failed buy attempt in 2018 for 400 billion Korean Won.
- Management complications and legal difficulties are making the sale drag along
South Korean cryptocurrency exchange, Bithumb, is reportedly looking for a buyer after a failed purchase in 2018. The exchange has been plagued by legal and management rights issues in the recent past, which could make the 500 billion Korean won ($430 million) sale almost impossible.
On Tuesday, the local financial news website, Herald Economy, reported Bithumb, South Korea’s largest crypto exchange is on the market for a buyer. According to the post, the investment bank participants are starting to take note of Bithumb’s sale, with the exchange boasting of nearly 5 million customers.
The investment banks report that Bithumb Holdings, the majority stakeholder in Bithumb exchange with 74% ownership, is looking to sell-off the exchange. One of the best audit firms in the country, Samjung KPMG, is in charge of selling the exchange between 500 billion won ($430 million) and 700 billion KRW ($608 million).
Since setting up the sale earlier this month, Bithumb has received several letters of buyer’s intent from domestic and foreign investors who see potential in the exchange. Despite the rising interest in Bithumb, there remain legal, and management complications are troubling the exchange and hence making it hard for investors to buy it. One investment banker focusing on the sale said,
“As management rights disputes and legal disputes continue, we are speculating that investors are trying to recover their investments and get out of their hands through the sale.”
Can Bithumb complete its 500 billion won sale?
On September 7, the Seoul Metropolitan Police Agency's Intelligent Crime Investigation Unit raided the Bithumb Holding main offices to find evidence to build a case against Lee Jung-hoon, Chairman of the board of directors at Bithumb Global and Bithumb Korea. Lee is charged with fraud after raising over $25 million in BXA tokens, Bithumb’s native token, investors, and not listing it afterward.
This raid followed a Sept 2 raid in the building, as federal investigations continue on the BXA token case. However, this is not the only problem facing a possible acquisition of Bithumb.
In 2018, Bithumb Holding was prepared to sell the exchange to South Korean BK Global Consortium, led by BK Medical Group Chairman Kim Byung-gun, for 400 billion won ($345 million). While the deal was ready to be closed, Kim Byung-gun failed to raise the rest of the investment and saw the deal fall through late October 2018.