South Korea’s Bithumb Exchange Clears a Major Hurdle in Its Long-Awaited IPO

After years of legal battles, Bithumb has finally cleared a major hurdle, bringing it one step closer to a stock market debut.

South Korea’s leading cryptocurrency exchange, Bithumb, is making strides toward its long-awaited initial public offering (IPO) as it pivots to attract institutional investors amid a changing regulatory landscape.

After years of legal battles and setbacks, Bithumb appears to be clearing major hurdles, bringing it one step closer to a stock market debut. A major roadblock was the legal case concerning the former chairman, Lee Jung-hoon, who was accused of fraud by a former business partner in a case that spanned years and ultimately reached the Supreme Court. According to local reports by Korea Economic TV, the Supreme Court has now ruled in Lee’s favor, eliminating a key legal risk for Bithumb.

With this issue behind them, the exchange is now focusing on pushing forward with its IPO plans, aiming for a 2025 listing on the NASDAQ. According to Samsung Securities, which was appointed to manage the offering, Bithumb is also considering a listing on a South Korean stock exchange after its U.S. debut.

Bithumb began working on its IPO strategy in 2020 but had to put plans on hold due to legal troubles and the company’s opaque ownership structure, which drew scrutiny from regulators. However, with new anti-money laundering (AML) regulations being implemented and a pilot program for institutional crypto access in the works, Bithumb is expected to speed up the process.

One of the biggest factors supporting Bithumb’s IPO is South Korea’s changing stance on crypto regulations. Until now, banks and large companies have been restricted from investing in cryptocurrencies, while institutions like the National Pension Service (NPS) have also been barred from the market. However, regulators are expected to loosen these rules later this year, allowing institutional investors to enter the crypto space.

A pilot program is set to begin soon, giving select institutional investors limited access to crypto investments. If successful, South Korean firms may be allowed to hold Bitcoin (BTC) and other digital assets on their balance sheets, similar to regulations in Japan and Hong Kong. This could bring significant new capital into the industry, boosting exchanges like Bithumb.

Furthermore, Bithumb has also partnered with KB Kookmin Bank, the country’s largest banking firm, to expand its corporate client base and strengthen its case for an IPO. The partnership with KB Kookmin is expected to help Bithumb attract more corporate clients, which could be a crucial factor for investors considering buying into the exchange through an IPO.

In contrast, Upbit, Bithumb’s biggest rival, has partnered with K Bank, another major South Korean banking firm, and is also reportedly planning an IPO. Upbit, operated by blockchain company Dunamu, is currently the larger exchange, with a greater trading volume and market share in the country.

Despite these positive changes, Bithumb still faces challenges. Regulators are currently conducting an AML investigation into the exchange, and any penalties or findings could impact the company’s IPO timeline. Plus, questions remain about Bithumb's ownership structure, particularly the involvement of businessman Kang Jong-hyun, who was previously linked to the exchange but later sold his shares.

As Bithumb clears these hurdles and pivots towards attracting institutional clients, it remains to be seen how quickly it can regain the trust of retail investors, who lost faith in the exchange following previous controversies and scandals.