Bithumb, South Korea’s largest digital currency exchange, is looking to be acquired. According to The Korea Herald, Bithumb is looking to sell their exchange for somewhere between KRW500 billion (roughly US$430 million) and KRW700 billion (roughly US$604 million).
There is a good chance that Bithumb is looking to sell due to their ongoing fraud investigation. According to an investment banking official in South Korea, “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.”
Will there be a buyer?
But will anyone actually buy the exchange? Bithumb and it’s chairman Lee Jung-hoo, are currently under investigation for fraud. That being said, whoever ends up buying it would inevitably end up inheriting the problems that come with the company. The buyer will also be forced to navigate South Korea’s Special Payments Act, which digital currency service providers will need to comply with beginning in March 2021.
The Special Payments Act requires all digital currency exchanges operating in Korea to implement a system that reports and operates in accordance with the bill’s requirements. It is not clear whether or not Bithumb currently has a system like that in place, which means that the exchange’s buyer will have to navigate that obstacle as well.
Up for sale… again
This isn’t the first time Bithumb has been up for sale. In 2018, the exchange was supposed to be acquired by Singapore-based BK Group with a price tag of around KRW400 billion (roughly US$344 million)
However, BK Group was not able to raise enough money in their investment rounds to buy Bithumb. As a result, exchange was not acquired, the BXA tokens they said they would list on their exchange once it was acquired were never listed, and Bithumb was catapulted into the fraud investigation that it is currently in the midst of–and now that we know Bithumb is trying to sell their exchange, it looks like the court’s decision regarding Bithumb’s chairman will not be in his favor.