After being raided by the South Korean police multiple times, Bithumb, the largest South Korean exchange, is now up for sale, according to a report from local media outlet the Herald. The sudden decision by the management is supposedly a move to help the original investors of the company.
As the largest exchange in the nation, Bithumb handles more than 50% of the domestic crypto trading volume in the nation and is considered the biggest driver of crypto trading with over 4.77 million users.
The report states that the exchange is selling 74% of stake in Bithumb Korea. The company has already received several letters of intent from unnamed investors, with offers ranging between $430 million to as high as $604 million for the acquisition of the platform.
Bithumb is in a mess
The exchange is currently under investigation along with its chairman Lee Jung Hoon, for charges of fraud and illegally transferring funds outside the nation.
As previously reported by The Daily Chain, the investigation is regarding the sale of BXA tokens which were supposed to power the exchange’s platform back in 2018, which the exchange allegedly pre-sold. It’s alleged that investors lost millions of dollars due to the fact that the token wasn’t listed.
Furthermore, the multiple police raids also resulted in the seizure of Bithumb shares owned by the company’s director Kim Byung-Geon, who was amidst the process of trying to acquire Bithumb.
Management Company Samjung KPMG, which is reportedly handling the sale of Bithumb holdings, has also filed a letter of intent to sell its own stake in the company.
Things are complicated
With all the above factors in play, and the exchange and its chairman currently under investigation by the Seoul Metropolitan police, the sale of Bithumb is a much-complicated process now.
Bithumb’s new buyer will be responsible for ensuring compliance with the Special Payments Act starting from March 2021. The bill puts policies in place regarding the reporting and operations of businesses, regulated license for digital asset service providers, and ensures compliance with FATF recommendations.
According to the South Korean investment banking industry, the sale of Bithumb Holdings is being perceived as an effort for investors to bypass all the legal and managerial disputes and recover their investments and exit the market.
Founded in 2014, Bithumb has had a rough journey so far and has been subjected to a fair share of controversies.The exchange has been victims of hacks over the years and has lost millions of dollars in funds. The company has also been under the radar of South Korea’s financial watchdog under the suspicion of tax evasion.