Bithumb exchange sale may be on the verge of collapse
On September 30, industry sources confirmed that the proposed sale of Bithumb may be on life support. A year after the largest cryptocurrency exchange service in South Korea decided to sell the company, they still find themselves looking to complete the transaction. This after an initial February deadline was extended three times to September 30, with no deal being finalized.
The initial deal was to sell a controlling stake in the company for 400 billion won ($333 million). The deal was to sell 50.1% of the controlling stake in the company to BK Global Consortium exchange.
The deal was expected to close in February, however, it was reported that BK Global paid just $100 million down at the time. An extension was granted, which was set for April, but that deadline was not met either and a second extension was granted. The reason given was that the Consortium wanted to increase their stake to 70% and needed additional time to finalize the details.
Finally, in July it looked like things were coming together when Dual Industrial purchased 57% of the BK Group for a reported 235.7 billion won ($197 million). At the time, it was concluded that this sale would give BK Group the needed capital to be able to complete the Bithumb transaction. However, that was not the case, and an additional extension was granted.
Early in September, Kim Byung-gun, chairman of the BK Group, looked to have found a new investor to assist in the completion of the purchase. Choo Yoon-hyeong, who is the brains behind Cornerstone Networks, was interested in participating in a capital increase at BK Group. With over 300 billion won ($250 million) in personal assets, he was willing to chip in 150 billion won ($125 million).
When this information went public, media reports had the deal all but completed. However, the September 30 deadline passed without the deal being finalized and no word of an extension was provided.
This has already not been a particularly good year at Bithumb. In June, charges were filed against the company in conjunction with a hack that allowed for customers financial information to be stolen. This came 14 months after the company reported a $180 million loss as well as a $13 million loss due to a hack attack.
Things were getting so bad that in March the company announced that over 50% of employees were to be laid off. This reduced their staff from 310 employees down to 150.
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