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Bithumb set to spin off non-exchange biz in IPO push

By Im Eun-byel

Published : March 24, 2024 - 15:10

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A screen shows bitcoin trading at over 93 million won ($69,000) at local crypto exchange Bithumb's headquarters in southern Seoul, Wednesday. (Newsis) A screen shows bitcoin trading at over 93 million won ($69,000) at local crypto exchange Bithumb's headquarters in southern Seoul, Wednesday. (Newsis)

Local crypto exchange operator Bithumb Korea is set to simplify its corporate governance, spinning off its non-exchange business in a move designed to accelerate its stock market debut planned for next year.

Bithumb Korea will separate its holdings business under a new name, tentatively coined Bithumb Investment, the company announced through a regulatory filing Friday.

While the existing unit will be in charge of operating the country's No. 2 crypto exchange Bithumb, the newly launched unit will take over the holdings, investments and real estate leasing business.

The shares will be divided in a 60:40 ratio between Bithumb Korea and Bithumb Investment. The spin-off will be approved through a shareholders' meeting slated for May 10 under an outlook to be completed by June 13.

While the company has explained the separation will enable Bithumb Korea to focus on providing a more transparent and stable service for the exchange, it is also expected to help the exchange operator accelerate its initial public offering drive, as the company plans to go public in the second half of 2025.

Bithumb Korea is likely to receive a better market valuation with solely its exchange business as commissions from the exchange take up some 90 percent of the company sales.

“The decision was made to promote the business efficiency of each unit,” an official from Bithumb Korea said. “The spin-off, which separates the exchange operation and new businesses, is expected to encourage independent and flexible management respectively.”

Since last year, Bithumb Korea has been pushing to become the first cryptocurrency exchange operator to go public in Korea. Primarily considering a listing on Korea's secondary tech-laden bourse Kosdaq, it selected local brokerage Samsung Securities as its lead underwriter in November.

The IPO plan is considered to be a move to increase its share in the local market currently dominated by Upbit, the largest crypto exchange here. Upbit takes up more than 80 percent of the market share, while Bithumb owns some 15 percent.

Meanwhile, Dunamu, the operator of Upbit, has not yet revealed an official plan for an IPO here. In 2021, it had considered making a listing on the New York Stock Exchange but failed to make progress. Despite the latest rally on the world's biggest cryptocurrency bitcoin, the company has been putting forward a stance that it does not consider an IPO for the time being.