Huobi, a Chinese crypto exchange heavyweight, could be set to close up a controlling stake in Bithumb, South Korea’s biggest trading platform – in an agreement that could form an Asian trading giant.
According to Bell Korea, an anonymous investment banking source considered to be close to the deal has affirmed that Huobi “has expressed interest” in purchasing “all of” parent company Bithumb Holdings’ accountability in the company.
As earlier reported, Bithumb Holdings has recently put up its stake in the firm for sale and has been actively looking for a buyer. Last September, brokerage Samjong KPMG mentioned that it represented the holding company, and other experts explained that there had been no shortage of interest from several parties.
Bithumb Holdings currently owns over 70% of Bithumb and is looking for a way out after a takeover deal fell apart in September last year.
At the time, “American and Chinese” companies were quoted as possible buyers by industry experts.
Bell’s source declares that the “shareholders of Bithumb Holdings are working to sell their entire stake.”
And the same reference declares that forthcoming government regulations may have forced Huobi’s hand. The firm already operates the Huobi Korea trading platform but does not currently offer real-name, social security number-verified banking services.
Under new legislation that promulgates in March 2021, existing real-name banking services guidelines will become compulsory, leaving many exchanges’ fates in the hands of banks – a fact that may force many exchanges currently unable to provide such services to close down.
Currently, only the traditional “big four” crypto exchanges – Bithumb, Upbit, Korbit, and Coinone – use real-name banking systems.
The unnamed source claimed that Huobi was trying to solve this problem through the proposed takeover deal.
The deal could allow Huobi Korea to merge with Bithumb or allow Huobi to continue trading under the Bithumb flag.
The source said,
“Huobi, which is urgently trying to secure real-name banking services, seems to be trying to resolve its concerns through the acquisition of Bithumb.”
At the time of writing (09:03 UTC), the 24-hour trading volume on Bithumb stands at USD 338m, on Huobi Global – almost USD 2bn, according to Coingecko.com data.
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