Recently, Daily Economy in Seoul reported that Bithumb, South Korea’s biggest cryptocurrency exchange, has been bought by Singapore-based BK Global Consortium, a blockchain investment firm formed by BK Global.
— Priya (@spacehuuuman) October 12, 2018
Bithumb is a cryptocurrency exchange headquartered in Seoul, South Korea. The exchange is the crypto market leader in terms of daily transactions. At the end of 2017, the average daily liquidity turnover at the site was equivalent to $ 1.3 billion. In June of this year, the exchange became a victim of a hack, losing $30 million worth of undisclosed cryptocurrencies.
The stolen coins included XRP, and after the theft, other assets were moved to a cold wallet where cryptocurrencies are stored in an offline regime and consequently can’t be reached via the internet. Moreover, as a result of the attack, Bithumb suspended its service of getting new customers onboard and called it a “service improvement process.”
Bithumb had a contract with the Nonghyup Bank, and in August of this year, it was renewed, and Bithumb started accepting new user registrations to its platform again.
After the recent deal, BK Global Consortium has become the largest stakeholder of the exchange, finalizing the contract to purchase 50% + 1 shares from BTC Korea Holdings owning 76 percent of Bithumb’s equity. The cost of the deal made up about $354 million.
The contract is expected to help maximize Bithumb’s potential to further develop blockchain technologies. BK Global Consortium will facilitate Bithumb’s development through its block chain e-commerce settlement system and stable coin operation, which greduce commissions on the existing settlement system. Moreover, the BK consortium believes that Bithumb will have a key role in many businesses that link digital money to real life.
Kim Byung-gun, the head of BK Global Consortium, is planning to buy shares from 10 shareholders. The deal will be finalized on December 12 with Korean shareholders. Kim has already announced that he is going to open ‘Bithumb Dex’ through his Hong Kong subsidiary this month. According to Kim, the Hong Kong-based Dex will enable users from all corners of the world to send and receive digital currency more smoothly. Dex will also help in solving the problem of hacking, especially apparent in Korean exchanges.
A spokesperson of the consortium said:
“Kim Byung-gun demonstrated his multinational management ability in the field of medical care, fintech, and blockchain in Singapore. He is the right person to pursue the systemization and globalization of the virtual currency exchange.”
The acquisition deal valued Bithumb at more than 1 trillion won, or around $880 million, plus the management rights premium. It is push for the exchange and an opportunity for the blockchain industry to pick up steam. The consortium stated:
“E-commerce companies such as Amazon and Alibaba are receiving large commission fees, which have become an issue for consumers. Blockchain payment systems can reduce those commission fees.”
The exchange added:
“We will also promote the introduction of stable coin to stabilize the payment system. We will be in conjunction with the global exchange scheme to take advantage of the coin linked to the US dollar.”
If a federation of companies owned by BK Consortium is created, reducing of commissions to 0% is probable, which means that the consortium will leave other companies behind, having a large competitive advantage.