Bithumb is indeed the largest cryptocurrency exchange platform in all of South Korea. Although business is doing well on the online platforms, they announced that they would be closing down some of their offices. This is to protect their staff from the ongoing COVID-19 pandemic. According to the press release dated Nov. 23, the company decided to temporarily halt activity at its Gangnam offline support center to prevent the coronavirus spread.
Bithumb noticed that the number of confirmed cases domestically had seen a sharp spike causing the authorities to take up more preventative measures. Apart from the Gangnam offices, the company has also closed down its Seoul support center on Nov. 24 until further notice. However, they have also made appropriate arrangements to ensure that their customers can also get online customer support should an issue arise.
The trouble with the law
Although Bithumb has been actively posting on their blog over the last couple of months, they haven’t spoken of their legal issues. Two of their executives are the target of South Korean police, who at some point raided their offices on allegations of fraud. Lee Jung-hoon, the company’s chairman, reportedly was summoned for questioning some due to illegal activity tied to him. The police alleged that he was attempting to transfer assets overseas without following due process and alerting the relevant government agencies.
The company allegedly made untrue advertisements regarding Blockchain Exchange Alliance (BXA) tokens. Apparently, they claimed that they would list the company seeing that they expected to acquire it. When the acquisition deal didn’t proceed as planned, the listing consequently fell through. This triggered a series of events that lead to a 99% crash in their token valuations.
The company’s only positive legal news is that the lawsuit filed by an investor claiming he lost $400,000 due to the organization’s negligence was dismissed. He claimed that his loss resulted from the 2017 Bithumb data breach, which the high court judge dismissed.
Once authorities will ease off the rules on social distancing, the company will again open its doors. However, it’s rumored that it may be under new ownership when it happens. Chinese crypto exchange giant Huobi is reportedly in talks to acquire the company. This move would have a massive shift as the company will be the biggest digital currency exchange in all of Asia. Recent reports show that Bithumb shareholders are quite open to the idea. This would mean Huobi will take over their business in South Korea after the new digital currency laws in the country have been implemented.
These laws require that crypto exchanges comply with the new KYC confirmation system. This means that you won’t be able to sell or buy cryptocurrencies until you can prove your identity. That means uploading identification documents such as a passport or an ID. With these new regulations in place, only four are permitted by law to trade. These include Coinone, Bithumb, Upbit, and Kobit.
Several reports surfaced back in September that the company was looking to be sold for about $430 million to around $604 million. Huobi is a big contender. In November 2019, the company was unable to profitably operate in the US market, citing unfavorable conditions. From then on, the company has been looking to enter the Japanese and South Korean markets. This makes it a very powerful contender in the region. Additional reports also indicate that the company is making moves to acquire Bitflyer, which is the biggest exchange platform in Japan, boasting an impressive 2.5 million active users.
Although it has been a tough year for many economies and businesses all around the world, the same cannot be said for the crypto industry in general. BTC (Bitcoin) was valued at $9,500 at the end of January this year, and today, it’s at $18,554. ETH (Ethereum), on the other hand, sold for $180, and now, it’s at $581.