Bithumb Eying Reverse Merger to Go Public

Blockchain Exchange Alliance, the Singaporean company that holds the majority stake in the cryptocurrency exchange Bithumb, is looking at acquiring a company that is already publicly listed in the US in a bid to list the exchange in the country.

Carrying Out a Reverse Merger

According to latest news reports, Blockchain Industries, which is a publicly traded holding company in the United States, announced that it had gotten a binding letter of intent from Blockchain Exchange Alliance.

A faster route to getting a company listed on a public stock exchange is by engineering a reverse merger. In this, a company acquires an already publicly listed company rather than taking the longer route of an IPO (Initial Public Offering).

According to an anonymous source, Blockchain Exchange Alliance had already explored the option of going public via an IPO, however the company did not want to wait for the 2-year period it would take to complete the process.

Now, if this reverse merger comes through, then Bithumb would be the first cryptocurrency exchange in the world to go public.

The same sources said that the new combined company would upgrade its listing from an OTC (Over-the-Counter) market to either the NYSE (New York Stock Exchange) or the Nasdaq.

Another Example of a Reverse Merger

This would, however, not be the only reverse merger in the industry.

In 2018, Mike Novogratz, a former hedge fund manager with Fortress Management Group as well as crypto investing personality, used the same strategy to have his crypto-investment bank listed on a Canadian stock exchange.

Novogratz acquired Coin Capital, a cryptocurrency-based startup, and then carried out a reverse take-over with a shell company in Canada called Bradmer Pharmaceuticals. The newly merged company was renamed Galaxy Digital Holdings and it now trades on the Canadian TSX Venture Exchange.

Controversy with Bithumb

Bithumb has also been in the center of controversy recently. The crypto exchange was accused of faking its trading volume numbers. CER (Crypto Exchange Ranks), an exchange ratings and analytics firm for cryptocurrencies, alleged that Bithumb was falsifying data, that as much as 94% of its trade volume was faked since mid-2018.

Bithumb responded to these accusations by issuing a statement. The cryptocurrency exchange stated that it was not doing anything to fraudulently inflate its trading volumes. The company also stated that it not selling any mining-based tokens. Bithumb said that it was attracting more customers by offering different types of promotions – just like any other normal business did.