The South Korean crypto exchange Bithumb, the second largest in the country, is already preparing for the listing on the Nasdaq stock market and aims to conduct an IPO until the second half of 2025. As reported by a local news publication, this strategic move was revealed during an extraordinary shareholders' meeting on September 30, 2023. Samsung Securities has been named as the lead manager for the preparations towards this international expansion by the company.
Bithumb had planned to enter the South Korean Kosdaq market as early as 2020. However, some problems with the regulatory framework and issues concerning the exchange's governance held these plans back. The most recent effort to pursue a Nasdaq IPO is a significant shift towards accessing a wider international market that may offer Bithumb the bargaining chip it requires to compete more effectively globally.
Several obstacles have been encountered as Bithumb seeks to move towards the IPO phase. Several cases of corporate governance problems and legal cases have acted against it, thus derailing earlier attempts at listing. Notably, the former chairman of Bithumb Holdings and Bithumb Korea, Lee Jeong-hoon, was involved in numerous legal issues involving fraud charges dismissed by the Seoul High Court in January 2023. These legal processes have raised questions for potential investors concerning Bithumb's operational transparency and legal liabilities.
Nevertheless, Bithumb still takes a stand on a number of the key market parameters and shares a considerable portion of the overall South Korean cryptocurrency market.However, it faces a major challenge from Upbit, which controls more than 80% of the market. Upbit established its market leadership through its early entry into the market and strict regulatory compliance, which indicates a high bar of competition for Bithumb.
Bithumb recently modified its organizational structure in several ways in anticipation of a potential IPO. This includes an organizational restructure in March 2023 in which it divided its Human Resources to achieve its commercial objectives better while maintaining a strategic focus on the company's lucrative virtual asset exchange operations. These changes were already instituted as part of overall improvements in operational efficiency and compliance with international standards that come with a Nasdaq listing.
The decision to list on the Nasdaq also comes at a time when several other cryptocurrency firms have also considered public offerings as a way of exploiting the growing opportunities in the emerging digital currency market. This could help Bithumb gain some level of market relevance in the global market as investors from different parts of the world seek to invest in firms that operate in the cryptocurrency exchange market.