Bithumb, South Korea’s largest bitcoin exchange alongside UPbit, is trying to convince the government of India to allow cryptocurrency trading.
Javier Sim, co-founder and managing director of Bithumb, said that the company is planning to expand into the Indian cryptocurrency market through local partnerships, funding cryptocurrency startups in the region.
In remarks reported by Indian business daily The Economic Times, Sim stated:
“We are open to talking to regulators, working with them to be a regulated exchange. We are a strong brand from Korea and do not involve ourselves in unregulated or illegal trade…We are looking for the right companies to partner with and invest in those that have knowledge of the Indian market.”
Due to the imposition of a ban on bitcoin and cryptocurrency trading by the Reserve Bank of India (RBI) on its banking partners, most major cryptocurrency exchanges in India have closed down in recent months.
Reports about Bithumb Global eyeing an entry into the Indian market come amidst an ongoing Supreme Court hearing regarding the decision of the RBI to prohibit bitcoin trading.
According to CryptoCompare, Bithumb accounts for 43.69 percent of the BTC-to-KRW trading pair, with UPbit falling slightly behind at 30.3 percent.
Since July, top cryptocurrency exchanges in India in the likes of Koinex and Cryptokart have shut down as a result of regulatory uncertainty in the local market, following the closure of Zebpay in mid-2018.
Similar to what most bitcoin exchanges have said about the cryptocurrency market of India in the past two years, Koinex said that the denial of banking services to cryptocurrency startups have created an extremely impractical environment for companies to operate in.
“Multiple delays by the government agencies in clarifying the regulatory framework for cryptocurrencies despite our pending writ petition in the Supreme Court of India, coupled with regular disruption in our operations, the final decision has been taken after duly considering all the latest developments in the crypto and blockchain industry in India,” the company said.
Based on the statements of bitcoin exchanges in India that have failed to sustain operations in the local market, the lack of transparency from the government regarding the regulatory frameworks surrounding the cryptocurrency sector has been preventing the sector from growing.
Bithumb could attempt to lead productive conversations by proposing to fund local cryptocurrency initiatives and startups but the plans of Bithumb would heavily rely on the final decision of the Supreme Court of India, which still remains an uncertainty.
Although Bithumb co-founder Javier Sim wants to leverage the strong brand of Bithumb in South Korea to engage in discussions with regulators, local reports indicate troubles for the $300 million deal the company agreed on last year.
In 2018, BK Global Consortium officially announced the acquisition of Bithumb at a $333 million valuation in a deal that required BK to put down $100 million and pay the rest in the coming months.
The Korea Herald reported that BK has not completed the remaining transaction in the $333 million deal, potentially placing the acquisition in jeopardy.
Cho Yoon-hyeong of Cornerstone Networks clarified that the deal is flowing smoothly but skepticism around the deal still remains.
The incomplete acquisition of Bithumb by BK could be relevant in the potential expansion of the company into India because the process is anticipated to be costly, in terms of monetary and labor-related resources.
Most of the bitcoin exchanges in India that have shut down in recent months were forced to make the decision because they could not sustain losses over a long period of time with merely hopes that the government of India would someday change the regulatory frameworks around the sector.
Bithumb employing a wait-and-see strategy while committing minimal resources in its expansion plans to India could prove to be beneficial in the long term. In the near term, at least until 2020, the expansion is seemingly becoming unlikely to materialize unless the Supreme Court hearing sees a major breakthrough.
Last modified: June 12, 2020 6:42 PM UTC