Mammoth $300 Million Crypto Exchange Bithumb Deal Is Going Bust

Journalist:
Adam Scott
September 30, 2019

Nearly one year after it was announced that South Korea’s largest cryptocurrency exchange, Bithumb, would be sold to BK Global Consortium for 400 billion won ($333 million), the deal appears to be going nowhere.

The acquisition, which would see BK Global Consortium purchase a 50 percent stake and one share, was originally announced by Bithumb operator BTC Korea Holdings on October 12, 2018. The purchasing company also put down $100 million as a down payment and had plans to create its own cryptocurrency, which hasn’t materialized either.

Where’s The Money?

The deal was supposed to be completed in February of this year but has seen two extensions. The deadline to pay the final acquisition amount was also extended twice. In April, payment was delayed on the condition that the purchasers increase the stake to 70 percent.

Today is the deadline to pay the remaining amount for the cryptocurrency exchange’s acquisition, and it seems that payment will not be made. As reported by The Korea Herald, “industry sources” claim that the BK Group’s chairman, plastic surgeon Dr. Kim Byung-gun, and its consortium have not completed the full payment.

Funding Issues

Speculation exists that BK Group has some financial problems relating to the agreement after a failed deal saw the company sell 57.41 percent of it to Dual Industrial, a Kosdaq-listed company, for 235.7 billion won. This move ultimately did not complete and has been seen by some as a means of financing the purchase of Bithumb.

Similar efforts continued this month when Cornerstone Networks’ Cho Yoon-hyeong reportedly pumped 450 billion won into BK Group. Cho stated today:

The deal is proceeding smoothly, and we’re working on details with BTC Holdings.

Bithumb Not Affected

Meanwhile, Bithumb claims that the deal is essentially irrelevant to the operation of South Korea’s largest cryptocurrency exchange. Notably, the crypto exchange reported a $180 million loss for the year 2018.

A representative stated:

Bithumb has stable management, so there won’t be any impact should the deal collapse.

Bithumb was infamously hacked earlier this year to the tune of $20 million.

This article was edited by Samburaj Das.

Last modified (UTC): September 30, 2019 09:09

Tags: Bithumb
Adam Scott

Adam lives in Upstate New York and has worked extensively in both fintech and entertainment media. You can email him at adamccn[at]protonmail.com.