Chinese digital currency exchange Huobi is reportedly eyeing a takeover of Bithumb, in a move that would create a new regional giant in the digital currency world.
According to recent reports, shareholders in Bithumb are reportedly open to the idea, which would see Huobi carrying on the business of Bithumb in South Korea after the implementation of new digital currency laws in the country.
This will require the exchange to obtain real name confirmation accounts, which would enable the firm to conduct business in South Korea. Currently only four firms have the required compliance rules in place to operate in the country, namely Bithumb, Upbit, Coinone, and Kobit.
Reports surfaced in September that Bithumb is looking to be acquired for somewhere between KRW500 billion (US$430 million) and KRW700 billion (US$604 million) amid the ongoing fraud investigations into the company.
Huobi’s operations remain largely in China, with most of its senior executives living in China. Since the exchange announced it was withdrawing from the U.S. market back in November 2019, the company has set its sights on South Korea and Japan, with plans to become a significant player in the region.
The company has also been reportedly interested in acquiring Bitflyer, the largest digital currency exchange in Japan with over 2.5 million active users. According to global transaction volume in crypto exchanges, Huobi is currently 7th, with Bithumb 12th and Bitflyer 19th respectively.
The moves come after strong trading at Huobi, which the company has attributed to strength in contract derivatives and its other businesses. With several targets now in its sights, it is clear Huobi is eyeing acquisitions to take the group to the next level.
Digital currency trading activity in Japan and South Korea is already high, though there tends to be a preference for locally based exchanges amongst consumers there. With Huobi moving to acquire a presence in both markets, this could allow the company access to these more closed markets through local subsidiaries.