The South Korean crypto exchange Bithumb has overcome a key legal hurdle as it steps up its efforts to become the first platform in the nation to launch an IPO.
Per a report from the South Korean media outlet Business Post, the Supreme Court has ruled against the prosecution in a long-running fraud case involving the former Bithumb Holdings and Bithumb Korea CEO Lee Jung-hoon.
Bithumb IPO: Will Exchange Make New York Debut This Year?
The exchange was also quoted as telling the outlet that it had made “no changes” to its goal” to launch “an IPO in 2025.”
A Bithumb customer service center in Seoul, South Korea. (Source: MTN Money Today Bangsong/YouTube/Screenshot)
A company spokesperson said that Bithumb was “working hard to proceed with the plan.”
Bithumb is now “expected to speed up the initial public offering (IPO)” process, having cleared up the “legal risks” surrounding Lee. The latter is also a major Bithumb shareholder.
The outlet noted that individuals “both inside and outside the cryptocurrency industry” now also “believe that Bithumb will accelerate its IPO bid this year.”
Bithumb is reportedly hoping to follow the US’ Coinbase and Japan’s Coincheck in launching on the NASDAQ stock exchange.
Coincheck share prices on NASDAQ since the company’s IPO in December last year. (Source: Google Finance)
A Five-year Quest
The company began exploring its IPO options back in 2020. But it was later forced to shelve its plans due to legal concerns over Lee, who was indicted in July 2021.
Bithumb has gone on record as stating that it is “pursuing an IPO.” The company has appointed Samsung Securities as its manager, and has spoken of its hope of “targeting a 2025 launch.”
Trading volumes on the Bithumb crypto exchange over the past seven days. (Source: CoinGecko)
Experts said that market conditions are now turning favorable for Bithumb in South Korea.
Regulators are set to finally allow banks and other companies to invest in the crypto market this year.
The financial authorities have already unveiled plans to allow a small group of institutional investors to access the crypto markets on a “trial basis” later this year.
If this “trial” proves successful, regulators have indicated they will follow up by letting companies buy tokens like Bitcoin (BTC) with their balance sheets.
Institutional Boost Incoming?
Insiders claim that corporations and institutional investors can invest more money than can the retail sector. And they say this could help domestic exchanges “increase their profitability.”
Experts are also optimistic about Bithumb’s new banking partnership with Kookmin Bank (KB), the nation’s largest banking firm.
They claim that the deal “may be more advantageous” for Bithumb than others when it comes to “attracting corporate customers.”
Its rival Upbit has partnered with the neobank K Bank, which is also aiming to launch an IPO of its own this year.
Important Obstacles Still Remain
At least two key hurdles remain in Bithumb’s way as it continues its IPO bid. The first of these is uncertainty over an ongoing probe from the regulatory Financial Intelligence Unit (FIU).
The FIU launched an on-site inspection at Bithumb on March 17, which will wrap up on March 28.
The regulator wants to investigate Bithumb’s compliance with anti-money laundering (AML) obligations, among other matters.
In a previous probe at Upbit, the FIU found scores of KYC (Know Your Customer) violations.
The regulator responded with heavy sanctions, including limits on the activities of new Upbit customers. The media outlet explained:
“Receiving a heavy penalty would have a negative impact on Bithumb’s IPO [bid]. As such, Bithumb cannot help but be sensitive to the probe’s results.”
The second hurdle pertains to Bithumb’s complex ownership structure, and ongoing questions about who owns the platform.
While the legal case has resolved some issues, questions still remain over the elusive businessman Kang Jong-hyun’s connections with the exchange.
The media outlet wrote that “clarifying its governance structure would be an urgent task for both Lee and Bithumb.”
In a further development, the media outlet MTN News reported that Bithumb will create a KB “account opening window” at its customer service lounge in Seoul’s Gangnam District on March 24.
The exchange launched the Gangnam branch of its lounge in July 2024. The exchange has also recently opened a new “Bithumb Lounge” in the Daechi neighborhood, also in Seoul’s affluent Gangnam District.
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