Nexon, the South Korean Gaming Giant, is reportedly planning to buy a 65% stake in Bithumb, South Korea’s largest digital currency exchange, for around 500 billion won ($460 million). According to the South Korean publication Maekyung, the Tokyo Stock Exchange-listed video gaming giant has so far signed a memorandum of understanding with Bithumb to facilitate the transaction.
As per Korean media reports, the total value of Bithumb’s current stock in the over-the-counter market is 1 trillion won ($914 million), which means that if the transaction goes through, Nexon will get a deal at a discounted rate.
Since August 2020, the sale of the exchange has been in progress. In September, preliminary bidding was held, and several financial and strategic investors, including domestic and foreign private equity fund managers, succeeded in bidding
Bithumb Third Purchase
If the deal between Nexon and Bithumb is successful, Nexon will be the owner of three digital currency exchanges. Three years ago, Nexon purchased a 65.19% stake in Korbit, a popular Korean platform, for 91.3 billion won ($83.4 million). In 2018, Nexon acquired an 80% stake in a European exchange, Bitstamp, for 434.9 billion won ($396.4 million.).
Founded in 1994, Nexon plays a significant role in the global gaming industry. Other popular gaming titles include Dungeon & Fighter and Nexus: The Kingdom of the Winds Kart Rider. Nexon will be a significant player in the space and will have market dominance in South Korea’s digital currency markets.
Bithumb, Korea’s largest bitcoin exchange, has been shaken by fraud issues involving their executive staff. Asian authority is investigating the platform for financial fraud involving $25 million. However, an investigation involving Lee Jung Hoon, chairman of the board at Bithumb Korea and Bithumb Holdings, is dragging.
Lee is accused of pocketing millions of dollars by selling Bithumb’s tokens to clients without listing them. The fraud case made the exchange to be put up for sale last year.
Reports note that the legal entanglement of the existing shareholders has also been prosecuted for defrauding by investors. The exchange may find it challenging to legally acquire registration with the South Korean authorities as a crypto entity.
Recent reports say that Bithumb has over 5 million subscribers. The company also intends to expand its products and upgrade its compliance measures to obtain a virtual asset business license. Soon we will find out if Nexon will get a deal.