Bithumb's IPO Dreams Clouded by Complex Ownership and Regulatory Risks
Bithumb, one of South Korea's largest cryptocurrency exchanges, is once again pursuing an initial public offering (IPO), but its complex ownership structure and regulatory scrutiny are casting a shadow over the process.
The company has been trying to go public since 2020, but it has faced significant hurdles. One major obstacle is its tangled web of shareholding relationships, which makes it difficult for investors to understand who ultimately controls the exchange.
Bithumb's ownership chain runs from Lee Jung-hoon, its former chairman and founder, through Bithumb Holdings and ultimately to Bithumb itself. However, several investment firms sit between Lee and Bithumb Holdings, while numerous companies and individuals are linked through a complex network of shareholdings.
The company's complicated ownership structure has led to disputes over management control since 2018. Lee is also embroiled in a prolonged legal battle with BK Group over its proposed acquisition of Bithumb.
Regulatory risks surrounding Bithumb are also mounting. The exchange is pursuing an administrative lawsuit challenging a partial business suspension and fine imposed by the Korea Financial Intelligence Unit in March. The FSS has also begun sanctions proceedings over a massive erroneous Bitcoin payment incident in February, which has left many investors concerned about the company's ability to comply with regulations.
Bithumb said it plans to accelerate preparations for the listing by strengthening its internal control systems, refining its accounting standards, and establishing a more transparent governance structure. However, industry officials are skeptical about the exchange's chances of success.