On October 11, Bithumb signed an agreement to sell of 38% of its stake to Singaporean Blockchain Consortium. Bithumb has been dominating South Koreas’ cryptocurrency exchange market according to its daily trade volumes.
About the sale and new valuation
The company gave up 38% of its equity for 400 billion Korean Won, an equivalent of $350 million as per current rates. Prior to the sale, BTC Holdings Company owned 76% Bithumb’s shares. The company stake currently stands at about 38%. According to the new numbers, Kim Byuang Gun, the chaiman of the BK Group is the biggest shareholder of the company.
The company currently has a valuation of 1 trillion Won or $880 million.
The new partners
Blockchain Consortium is a blockchain subsidiary of the BK Group founded by Kim Byung Gun. Besides the BK Group, Byung Gun also manages ICO Platform Pte.Ltd, an investment advisory firm for ICOs based in Singapore. After closing the 38% deal with BTC Korea Holdings, BK group will be buying back Bithumb’s shares from 10 other shareholders in a bid to strengthen the company’s ownership.
Bithumb woes
Bithumb has been going through a tough third quarter following June’s hack in which the company lost $14 million. The security hiccup prompted CoinMarketCap to delist the company from its global index. These security concerns forced Bithumbs to suspend new account registration, a move that saw a drop in its trading volumes. However, the company had reportedly made profits of about $35 million in the first quarter of 2018 before succumbing to hacking.
Bithumb has recently been rumored to be participating in wash trading following the company’s security crisis.
Through the acquisition, the BK Group is looking to strengthen its Asian market presence by integrating the group’s current activities with those of Bithumb.
The biggest task ahead for Kim Byung Gun and his BK Group will be to clean Bithumb’s tainted image and restore the ‘Asian-Giant’ to its former glory. Splashing $350 million into a troubled company is evidence that the Singaporean investors believe that they can actually bring back Bithumb to its winning days.