Bithumb, South Korea’s second largest cryptocurrency exchanges, has taken a significant step toward its long-awaited initial public offering (IPO) after overcoming a key legal battle.
The Supreme Court ruled against the prosecution in a long-running fraud case involving former Bithumb Holdings and Bithumb Korea CEO Lee Jung-hoon.
With this ruling, Bithumb has resolved a major legal risk, bringing clarity to its governance structure.
Lee, who is also a major shareholder, had faced legal uncertainty since his indictment in July 2021.
Now, market observers believe the exchange will accelerate its IPO bid.
A company spokesperson reaffirmed its commitment, stating there had been “no changes” to its plan to go public in 2025.
The spokesperson added,
“We are working hard to proceed with the plan.”
Bithumb first began exploring IPO options in 2020 but was forced to put its plans on hold due to legal complications.
Now, with those obstacles easing, the company is pushing ahead with renewed confidence.
It has appointed Samsung Securities as the underwriter for its IPO and is targeting a listing on the NASDAQ, following in the footsteps of US-based Coinbase and Japan’s Coincheck.
Market conditions in South Korea are also becoming more favorable for cryptocurrency firms.
Regulators are set to allow banks and select institutional investors to enter the crypto market later this year.
If the trial phase proves successful, regulators may expand investment opportunities, potentially allowing corporations to allocate funds into digital assets such as Bitcoin.
The potential influx of institutional money could strengthen South Korea’s crypto industry.
Industry insiders suggest that institutional investors have significantly more capital than retail traders, which could enhance profitability for exchanges like Bithumb.
Adding to its momentum, Bithumb has secured a strategic banking partnership with KB Kookmin Bank, the country’s largest financial institution.
This alliance is expected to be a competitive advantage in attracting corporate clients.
In contrast, its rival Upbit has partnered with neobank K Bank, which is also preparing for an IPO this year.
Despite recent progress, Bithumb still faces two major hurdles before it can successfully go public.
The first is an ongoing investigation by South Korea’s Financial Intelligence Unit (FIU).
On 17 March, the FIU launched an on-site inspection at Bithumb to evaluate its compliance with anti-money laundering (AML) regulations.
The probe, set to conclude on 28 March, will determine if the exchange has met its legal obligations.
Previous FIU inspections have resulted in severe penalties.
When the regulator audited Upbit, it discovered multiple violations of Know Your Customer (KYC) rules and imposed sanctions, including restrictions on new customer activities.
A similar outcome for Bithumb could negatively impact its IPO plans.
Another lingering issue is Bithumb’s complex ownership structure.
While the Supreme Court ruling has provided some clarity, questions remain regarding businessman Kang Jong-hyun’s links to the exchange.
Kang Jong-hyun
Regulators and industry observers have emphasised that establishing a clear governance framework is crucial for Bithumb’s IPO prospects.
A report by South Korean media outlet MTN News revealed that Bithumb is taking steps to strengthen its banking services.
On 24 March, the exchange will introduce a KB account opening service at its customer lounge in Seoul’s Gangnam District.
This follows the launch of the Gangnam lounge in July 2024 and a new Bithumb Lounge in the nearby Daechi neighborhood.
As Bithumb works to address these challenges, its ability to navigate regulatory scrutiny and establish a transparent corporate structure will be critical in determining whether it can meet its 2025 IPO target.
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