Crypto exchange Bithumb taps Samsung Securities for Kosdaq IPO

According to local media reports, Bithumb has appointed Samsung Securities as its underwriter for the potential listing, aiming to list on Kosdaq, South Korea’s equivalent to the Nasdaq.

This move follows a period of legal and leadership challenges for Bithumb, the country’s largest cryptocurrency exchange. The company’s former chair, Lee Jeong-hoon, who faced fraud accusations related to the exchange’s acquisition in 2018, was acquitted and then rejoined the board as a registered director.

Bithumb’s IPO plans, while being the first of its kind for a Korean crypto exchange, are not just about market expansion. The exchange, holding assets over 400 billion won (about $300 million), is looking to rebuild public trust after it faced, along with other exchanges, government scrutiny, including a raid on its offices earlier this year.

The IPO is also a part of Bithumb’s strategy to improve its governance and management transparency. The exchange has been keen to revamp its image after South Korean prosecutors arrested Kang Jong-Hyun, its anonymous chairman and owner, on charges of embezzlement and stock manipulation. Jong-Hyun’s sister, Kang Ji-Yeon, and the CEO of two publicly traded Bithumb affiliates, Inbiogen and Bucket Studio, were also slapped with the same charges.

Kang and other top executives allegedly manipulated the stock price of Bithumb’s affiliate companies using convertible bonds.

The development comes as authorities attempt to unravel the mysteries surrounding the ownership of the exchange. In late December, Park Mo, the vice president of the largest shareholder firm of Bithumb, committed suicide in his home.

Bithumb was also raided by police and tax agencies for alleged tax evasion. The country’s tax inspectors visited the exchange’s headquarters in Seoul, as part of a push to increase taxation and compliance. The current investigation extends to domestic and international transactions of Bithumb Korea, Bithumb Holdings and affiliates.

The exchange was in the news recently after its former chair, Lee Jung-Hoon, was acquitted on charges of defrauding the business of $70 million during the acquisition of the South Korean crypto exchange. South Korean prosecutors were also seeking an eight-year jail sentence for Lee Jung-hoon, the de-facto owner of the country’s second-largest crypto exchange, in another $100 million fraud case.

Earlier in January, the South Korean supreme court ordered Bithumb to pay more than $200,00 in fines for users who suffered following a service outage in 2017. The final ruling overturns a previous court decision in favor of Bithumb against the investors. Monetary restitution to victims is said to remedy damages ranging from as little as $6 to around $6,400 to each of the 132 investors who filed a lawsuit against the crypto exchange operator.