Bithumb, the crypto exchange from South Korea, has indeed acknowledged the news of its intentions to initiate an initial public offering (IPO). However, the prospects of their plans are being jeopardized by financial concerns and persistent legal complications.
According to reports from South Korean news sources, Bithumb, a cryptocurrency exchange, aims to achieve a milestone by being the pioneer exchange in the country to transition into a publicly traded entity.
In 2021, there were speculations about the potential initial public offering (IPO) of Upbit, a rival trading platform, and its operator Dunamu on the renowned New York Stock Exchange.
Nevertheless, discussions in this regard have swiftly diminished since the advent of an extended period of gloom in the world of cryptocurrency.
Bithumb, however, is said to be aiming to outsmart its competitor by pursuing an initial public offering on the Korea Stock Exchange instead.
What’s the Potential Target Date for Bithumb’s IPO Debut?
Bithumb has recently taken an important step towards its initial public offering (IPO), as it appointed Samsung Securities as its underwriter towards the end of the previous month. The media outlet reported that Bithumb has wasted no time and has already commenced its IPO preparations.
According to the media outlet, the company has not yet set a specific timeline for its listing or established a specific value for the corporation.
However, it has been rumoured that the company is optimistic about finalizing its listing sometime within the latter half of 2025.
According to reports, there are discussions about the exchange exploring the potential opportunity to shift its listing to the KOSPI market at a later point.
Bithumb was unfortunate to receive news of the IPO at a particularly unfavourable moment.
Bithumb’s operating losses in the third quarter of the financial year were disclosed by Decenter, amounting to nearly $500,000.
During the same time frame as last year, the company experienced a decline in sales exceeding 53%, leading to two successive quarters of deficit.
Are there any legal obstacles that Bithumb might face?
The company’s top management and individuals under suspicion of ownership have faced persistent legal troubles as well.
Lee Sang-jun, the head of Bithumb Holdings, finds himself entangled in a contentious debate surrounding the addition of a coin to the company’s list, which coincidentally implicates a renowned golf champion.
The controversial failure of a takeover had a deep impact on the company, causing a ripple effect that extended to a highly contested token listing controversy.
Lee’s departure from the company’s board of directors is a result of a broader restructuring within the Bithumb boardroom.
Lee’s journey through the legal system took an unexpected turn when he was found not guilty of fraud charges. However, fate had more in store for him as his case now evolves within the esteemed confines of the High Court.
There are still uncertainties surrounding the intricate ownership structure of the company.
The exchange has been rattled by allegations suggesting that Bithumb’s actual proprietor is an enigmatic entrepreneur named Kang Jong-hyun.
Kang is presently undergoing trial for allegations encompassing breach of trust, embezzlement, and manipulation of the stock market.
What motivates Bithumb’s desire to initiate an Initial Public Offering (IPO)?
Unnamed sources from within the industry have affirmed that Bithumb regards an IPO as a key tactic to gain credibility from the public and narrow the disparity between itself and Upbit.
The crypto market in the country is predominantly dominated by Upbit, securing a share exceeding 80%, while Bithumb holds roughly 15% of the market.
Economists recently reported that Bithumb has adopted drastic tactics for bolstering transaction volume and stretching its market reach.
The endeavours encompass implementing a policy of no commission charges that strives to enhance the competitiveness of transaction prices.
Experts in the field stressed that Bithumb must swiftly enhance its managerial framework and significantly enhance transparency as prerequisites for a prosperous initial public offering (IPO).
As parliamentarians seek to enforce fresh IPO regulations, legal professionals have highlighted yet another possible complication.
The proposed regulations entail granting stock market officials the authority to scrutinize the criminal backgrounds of not just CEOs and executives of IPO candidate firms, but also owners and individuals holding more than a 10% stake in the relevant company.
Frequently Asked Questions:
1. Does Bithumb have any active plans regarding embarking on an initial public offering (IPO)?
Although Bithumb is confronted with financial hurdles and legal complications, the company has unyieldingly stated its objective of initiating an IPO. Its ambition is to secure the distinction of being the inaugural cryptocurrency exchange in South Korea to take the plunge into public trading.
2. What is the underwriter for Bithumb’s IPO and when did they commence preparations?
After the preceding month, Samsung Securities was chosen by Bithumb as its underwriter and initiated the necessary preparations for its IPO, as per reports.
3. When can we anticipate Bithumb’s initial public offering (IPO) becoming listed on the market?
Bithumb aspires to finalize its initial public offering (IPO) in the latter part of 2025, though specific timelines and the anticipated corporate valuation remain undetermined.
4. Which stock exchange does Bithumb intend to be listed with, and is there a potential for altering this listing down the line?
Bithumb has set its sights on going public through an initial public offering (IPO) on the Korea Stock Exchange (KRX). Furthermore, there are plans under discussion to potentially migrate to the KOSPI market at a later stage.
5. What are some of the recent financial hurdles that Bithumb has encountered?
In the third quarter, Bithumb disclosed operational deficits of close to $500,000 alongside a substantial drop of over 53% in sales when compared to the corresponding duration of the previous year.
6. Does Bithumb face any legal obstacles that could impede its intentions to go public through an initial public offering?
Bithumb’s management team, led by its CEO Lee Sang-jun, has encountered legal troubles, notably due to a contentious coin listing incident. Furthermore, the organization is confronting intricate ownership arrangements and persistent litigation conflicts.
7. What is the motivation behind Bithumb’s decision to pursue an initial public offering (IPO) despite the difficulties it faces?
Bithumb perceives an initial public offering (IPO) as a shrewd manoeuvre to safeguard confidence from the masses, diminish the disparity with its competitor Upbit, and elevate its standing in the market. To amplify transaction volume and extend its presence in the market, the exchange has enacted measures like a commission-free policy that attracts no charges.