Thursday, January 24, 2019

Bithumb Enters ‘Reverse Merger’ to Go Public in the U.S.

Bithumb Enters ‘Reverse Merger’ to Go Public in the U.S.

Bithumb, one of the biggest cryptocurrency exchanges by trading volume, could soon go public in the United States. The process could be executed via a reverse merger. Investors may soon have the opportunity to invest in Bithumb following its listing on the OTC (over-the-counter) US stock market. The company is looking to enter the US market by acquiring a publicly traded company there, Blockchain Industries Inc.

Blockchain Industries trades publicly on the US OTC markets under the BCII ticker. On Tuesday, the company announced that it had signed a binding letter of intent with Bithumb. Once the deal goes through, the company becomes Blockchain Exchange Alliance (BXA). The reverse merger is a nonconventional method of getting into the public markets.

The merger provides BTHMB an opportunity to enter into the US markets faster than an initial public offering (IPO) would. Additionally, it will potentially make the firm to become the first U.S.-listed crypto exchange. Reports by CNBC say that BAX chose the US over Singapore to avoid two-year delays of waiting for an IPO. Both parties confirmed that they aim to complete the deal by March 1, 2019.

The Deal

Bithumb has already stated that they will put $1 million into an escrow account. The money will show a serious consideration for the deal that is still undergoing intensive reviewing by the parties involved. Also, they are in the process of discussing a final agreement on valuations and terms of engagement.

According to the CEO of Blockchain Industries, Patrick Moynihan, the merger will bring accessibility, liquidity, and expansion to the blockchain industry. He also said:

“By merging with BTHMB/BXA, we expect to bring more advanced technology and better compliance practices into the public marketplace via a consolidated focus.”

The statement says that this deal will help Bithumb expand its operations in the North American region. The deal comes after Bithumb sold at least 38% of its ownership to a Singapore-based consortium. The Byung Gun Kim (plastic surgeon)-owned consortium paid approximately $350 million for the 38% stake of Bithumb.

Kim, in Tuesday’s statement, stated that:

“By unifying our businesses, we gain from the focused expertise of Blockchain Industries. As a result, we anticipate quality results from this merger.”

However, the involved parties never revealed the value of the BXA shares once they start trading on the OTC market.


Although the reverse merger plans are going well, regulators are buzzing. The watchdog is hesitant to allow US retail investors to invest in BTHMB. The regulators ask serious questions after the Bithumb platform together with several other exchanges suffered a hack-related theft in 2018.

As we said earlier, the hackers made away with around $31 million. That amount is relatively small compared to the Coincheck $530 million hack. The June 2018 breach on Bithumb raises concerns about its security policies. The company has also encountered allegations of inflating its reported trading volumes.

CryptoExchangeRanks published a report in December 2018 stating that the exchange’s reported volumes appear highly ‘watered.’ The report revealed that a strangely large number of trades clustered around the same period of every trading day.

Bithumb Enters ‘Reverse Merger’ to Go Public in the U.S.

Bithumb Enters ‘Reverse Merger’ to Go Public in the U.S.

Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.

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