Leading South Korean cryptocurrency exchange Bithumb is considering listing publicly its shares in South Korea according to local media reports. MoneyToday reported on June 24th that controversial exchange Bithumb had begun the process of preparing an IPO filing together with Samsung Securities acting as its IPO underwriter.
If confirmed, this will become Bithumb’s second attempt at listing its shares publicly following a similar attempt last year through a reverse merger led by the then controlling shareholder Singapore-based holding firm Blockchain Exchange Alliance. The company was seeking to list publicly in the United States.
The MoneyToday report was scanty of details expectedly given that the process has only just begun. Bithumb has also not confirmed the report as of press time. However, conducting a successful IPO for Bithumb may prove challenging given the controversies surrounding the company.
First off, the company is fighting off a hefty tax bill of $69 million in South Korea it claimed was baseless considering that South Korea does not formally recognize cryptocurrencies as legal tender. This case is still in court.
Second, the South Korea regulatory environment regarding the use of virtual assets is not particularly positive. Although, due to changing views from global leaders and regulators towards blockchain and cryptocurrencies, the South East Asian country may be reconsidering its stance.
For instance, earlier this month, the country’s Finance Minister Hong Nam-Ki announced that the government of South Korea was considering implementing a tax on cryptocurrency activities. The regulatory factor may be the largest impediment to publicly listing a virtual assets business in South Korea.
The last hurdle to cross will be the company’s internal structures. Currently, Bithumb exchange has a somewhat “opaque” composition of shareholders. Bithumb Korea is the largest shareholder claiming a share of 74.1% of the company however, little is known about the composition of Bithumb Korea’s shareholders.
To add on top of this problem is the fact that Bithumb Holdings executive Lee Jung Hoon has previously been sued for economic crimes concerning his involvement with the acquisition of Singapore-based BTHMB Holdings. Considering all these factors, it seems that Bithumb’s IPO may need something short of a miracle to see the regulatory green light.