Business & Finance

Despite Surviving Hacks, Bithumb Facing Uncertainty with $300 Million Worth Deal

About a year ago, South Korea’s largest cryptocurrency exchange platform, Bithumb was a part of a deal whereby it was to be sold to the parent company of Singapore-based BK Medical Group, BK Global Consortium by February this year. However, it seems that the deal worth a whopping $300 Million is at risk of falling apart.

Founded way back in 2014, the South Korean digital asset-trading platform has managed to remain quite dominant in the country’s local crypto ecosystem. Bithumb despite being the target of three high profile breaches, which resulted in the loss of user funds worth tens of millions of dollars, has somehow retained its position staying at the top of the crypto network and sharing the spotlight with UpBit, another South Korean exchange platform touted as the “most trusted crypto-asset exchange”.

The fact that Bithumb’s name remains amongst the top crypto exchange platforms is somewhat alarming as of the three security breaches that befell on the platform, the most recent happened only a month ago. According to reports, the August hack of Bitthumb resulted in a loss of $19 million worth of EOS and XRP, making it the eighth-largest hack in crypto history.

READ ALSO: It’s 2019, Do You Know Where Your Crypto Are?

However in spite of all the tough luck, the platform caught the eye of BK Global Consortium and in October 2018, Kim Byung-gun, who happens to be a prominent plastic surgeon, blockchain investor and the chairman of the BK Group, finalized the deal between the two companies.

Based in Singapore, BK Global Consortium is a FinTech company that aims to bridge the gap between the traditional financial infrastructure and the promising crypto assets market via the Blockchain Exchange Alliance (BXA).

In one of its reports, the company explained the reason behind the acquisition of Bithumb was its booming user base. Per the report, the exchange’s 4.3 million registered users will be leveraged upon by BXA in order to expand globally.

These users within the Bithumb ecosystem are already familiar with how new technologies powering crypto assets function and are most ready to embrace the new financial system.

According to reports, as per the acquisition deal, BK Global Consortium was to purchase a 50 percent stake. However, almost a year has passed and nothing has been achieved beyond the papers, despite the fact that purchasing company further put down $100 million as a down payment.

READ ALSO: Nigerian Crypto Wallet’s Alleged Exit Scam Costed Users Loss of $1Million

Moreover, BK Global Consortium was said to have plans to engineer its very own cryptocurrency, but again that hasn’t materialized yet either, even though the deal was planned for February this year. It already has gone through two extensions; even the deadline for the payment of the final acquisition amount has been extended twice by now.

The latest deadline to pay the final amount was supposed to be today but according to a local newspaper The Korea Herald; some of the industry sources claim that the Consortium has not completed the full payment. There have been certain suspicions floating around the industry that the purchasing group is facing funding issues due to some financial problems.

If the deal doesn’t follow through and ends up collapsing, it’ll be a downer for a majority of the investors in South Korea, as they were highly optimistic about it. Because if Bithumb’s acquisition went through every major cryptocurrency exchange in the country, would have been operated by a large-scale conglomerate.

Upbit is run by Kakao, Gopax is run by the country’s largest commercial bank Shinhan, Korbit is run by $15 billion Nexon, and Bithumb would have been operated by BK. What’s peculiar about exchanges backed by conglomerates is that none of the platforms have experienced security breaches and successful hacking attempts. Which is probably due to the fact that they are very particular about their name value and brand image.

READ ALSO: UK Authorities Will Auction Bitcoin Worth Half a Million

Meanwhile, Bithumb has claimed and emphasized that the deal is irrelevant when it comes to the exchange’s operations and that business on the platform will continue as usual, even under the circumstances that the deal goes bust. A representative reportedly said:

Bithumb has stable management, so there won’t be any impact should the deal collapse.

As doubts cloud the existing deal’s viability, there have been reports suggesting that the anonymous Chinese and America investors are interested in the acquisition of the South Korean exchange platform. However, nothing is certain until the deal is called off officially by both the involved parties, which hasn’t happened as of yet.

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Abeer Anwaar

Abeer holds a Bachelors degree in Media studies and covers blockchain startups for BlockPublisher. An optimist, excels in the art of the written word and swears by the joy of all things sweet. Contact the editor at editor.startups@blockpublisher.com

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