Is The Acquisition Of the Bithub Exchange In Danger?

1 min reading

It was announced a year ago, that, Bithumb, a struggling Korean cryptocurrency exchange, would be taken over by another entity. Currently, the whole contract may not be completed.


Contract Details

In October 2018, BK Global Consortium announced the acquisition of 50% +1 share of BTC Holding Co. which is currently the largest investor in the Bithumb crypto exchange. As reports show, the transaction was supposed to reach a value of around 333 million dollars. What is more - the consortium made 100 million advance payments, which were supposed to be allocated for the creation of its own cryptocurrency. The creation of the cryptocurrency plan was not carried out, however and there is even a problem with the acquisition of the exchange. 

Bithumb has been facing various problems since the very beginning. It was the victim of hacker attacks more than once, the government accused it of tax fraud (the founders were finally acquitted). The whole year 2018 brought significant losses, resulting in mass layoffs and exchange's financial losses. 

 

What happens to the acquisition of the exchange?

It is clear, that there are more and more problems. The contract states that the acquisition should be finalized in February 2019. When it did not happen, the condition was set that it could be postponed if BK would decide to buy 70% of the shares. Part of the amount has been paid, while the rest of it should be paid by now. There is little indication that it would be paid, though.

The consortium is said to have financial problems after it failed to sell part of its shares to Dual Industrial for nearly $200 million. The purchase of Bithumb shares was supposed to be financed from this money. 

The exchange itself is in extreme need of subsidization because of the losses it suffered in 2018. Without this cash injection, its further activity may probably be at risk. Nevertheless, the representatives reassure, that nothing like this threatens it.

Chinese and Americans expressed their interest in the takeover, however, which would certainly save Bithumb's reputation, given the recognition that these two countries enjoy in the cryptocurrency business.

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