Chinese crypto exchange heavyweight Huobi could be set to snap up a controlling stake in Bithumb, South Korea’s biggest trading platform – in a deal that could create an Asian trading behemoth.
Per a report from The Bell Korea, an unnamed investment banking source believed to be close to the deal has stated that Huobi “has expressed interest” in purchasing “all of” parent company Bithumb Holdings’ stake in the company.
As previously reported, Bithumb Holdings has recently put up its stake in the firm up for sale, and has been actively looking for a buyer. In September, brokerage Samjong KPMG told Cryptonews.com that it was representing the holding company, and other experts explained that there had been no shortage of interest from a number of parties.
Bithumb Holdings currently owns over 70% of Bithumb, and is looking for a way out after a takeover deal fell apart in September last year.
At the time, “American and Chinese” firms were cited as possible buyers by industry experts.
The Bell’s source claims that the “shareholders of Bithumb Holdings are working to sell their entire stake.”
And the same source claims that forthcoming government regulations may have forced Huobi’s hand. The firm already operates the Huobi Korea trading platform, but does not currently offer real-name, social security number-verified banking services.
Under new legislation that promulgates in March 2021, existing real-name banking services guidelines will become compulsory, leaving many exchanges’ fates in the hands of banks – a fact that may force many exchanges currently unable to provide such services to close down.
At present only the traditional “big four” crypto exchanges – Bithumb, Upbit, Korbit and Coinone – use real-name banking systems.
The unnamed source claimed that Huobi was trying to solve this problem through the proposed takeover deal.
The deal could potentially allow Huobi Korea to merge with Bithumb, or allow Huobi to continue trading under the Bithumb flag.
The source stated,
“Huobi, which is urgently trying to secure real-name banking services, seems to be trying to resolve its concerns through the acquisition of Bithumb.”
Cryptonews.com has contacted both Huobi and Bithumb for comment on this report and will update if an answer is forthcoming.
At the time of writing (09:03 UTC), the 24-hour trading volume on Bithumb stands at USD 338m, on Huobi Global – almost USD 2bn, according to Coingecko.com data.