Bithumb Exchange Eyes U.S. Listing by Reverse Merger

Bithumb U.S. listing reserve merger IPO cryptocurrency blockchain

South Korean crypto exchange Bithumb has its sights set on the U.S. market, with plans to go public through a reverse initial public offering, according to reports today.

The exchange, one of the world’s largest by transaction volume, announced it had signed a binding letter of intent with U.S.-traded Blockchain Industries, a company that specializes in investments around the blockchain space.

Acquiring Blockchain Industries would enable Bithumb to list on U.S. exchanges, without the need for meeting the compliance threshold associated with an IPO, in a process known as a reverse merger or reverse IPO.

When the deal completes, the new entity will be known as Blockchain Exchange Alliance, and would become the first crypto exchange of its kind to be listed for U.S. investors.

While the deal is still subject to due diligence processes, Bithumb has already put up $1 million in escrow in consideration for the deal, with final terms around valuation still to be confirmed.

Patrick Moynihan, CEO of Blockchain Industries, welcomed the move, which he said would help grow the blockchain sector as well as providing much-needed liquidity and accessibility in the market.

“By merging with BTHMB/BXA, we expect to bring more advanced technology and better compliance practices into the public marketplace via a consolidated focus.”

The deal comes at a time when Bithumb is looking to focus on U.S. expansion, in a bid to consolidate its position as a global market-leading exchange platform.

There is recent precedent for reverse IPOs in the crypto and blockchain space, following a similar move in Canada by crypto hedge fund pioneer Mike Novogratz. His crypto merchant bank Galaxy Digital merged with Bradmer Pharmaceuticals, a Toronto-based listed company, in order to gain access to a listing in Canada.

The move follows the recent sale of 38 percent of Bithumb to a Singapore consortium, led by leading plastic surgeon Byung Gun Kim.

In a statement on the merger, Kim said he expected significant results from merging the expertise and reach of both businesses.

“By unifying our businesses, we benefit from the focused expertise of Blockchain Industries. As a result … we expect quality results from this merger.”