Victor Ugochukwu · Dec 14, 2020 . 5min read
Huobi Global all set to takeover Crypto Exchange Bithumb
South Korean crypto exchange Bithumb has received offers from various companies for takeover, including Chinese based crypto exchange Huobi Global.
By Komal Joshi · Nov 18, 2020 . 6min read
Huobi Global, the Chinese crypto exchange is all set to take over the Korean crypto exchange Bithumb. The crypto exchange Bithumb has received offers from various companies who aspire to take over the company. As reported by The Bell, Huobi and a broadcasting company are amongst the highest bidders for the Korean exchange.
According to the reports, shareholders of Bithumb parent company, Bithumb Holdings desire to trade their position in the company. Currently, Bithumb Holdings controls 100% of Bithumb. Furthermore, if a deal with Huobi is successful, the Chinese exchange would maintain a predominant share of the company.
Huobi Global’s decision influenced by new regulations from the Korean government
According to the reports, the new regulations introduced by the Korean government might have influenced Huobi’s decision. The company recently provides services in the nation under the banner Huobi Korea. However, it does not present the real name and social security number-verified banking services.
The new regulations that will be effective from March 2021, which state that a real name banking services contract is obligatory. This law created confusion in Korea’s crypto community as regulators compelled multiple exchanges to terminate their services. Currently, only the top four crypto exchanges in Korea use real-name banking systems. It includes Bithumb, Upbit, Coinone, and Korbit.
Moreover, Huobi will be capable of bypassing the new rule by merging Huobi Korea with Bithumb. It could also allow Huobi Korea to resume trading using Bithumb’s trademark. However, the acquisition may not be easy as Huobi could face opposition from a broadcasting company as a leading contender. The company will be further developing its business into blockchain technology.
Bithumb’s set of the fiasco
As per Bithumb, it is currently on the radar of the law for alleged money laundering. The South Korean police ransacked its office two times before eventually calling Lee Jung-hoon, the exchange’s Chairman for investigations. Bithumb’s difficulties commenced with involvement with the BXA’s token. It was issued by the Blockchain Exchange Alliance (BXA) and the Singapore-based BXA consortium. One of the provisions of takeover was the responsibility of the Korean crypto exchange to list the BXA token, which it never took. The exchange had already raised about US$24 million and its unwillingness to list the token had provoked the authorities’ progress to investigate the company.
Conclusively, this takeover will benefit both Huobi Global and Bithumb if things work out successfully and at an appropriate pace.
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