By Yoon Sung-won
Nexon invested more than 900 billion won to acquire cryptocurrency exchange Korbit, aiming at diversifying its business portfolio, according to the company, Friday.
The game company announced this week that its parent company NXC decided to acquire 125,000 shares of Korbit for 91.25 billion won. After the acquisition, NXC will hold 65.19 percent of Korbit. Nexon founder Kim Jung-ju is leading NXC.
The move came after explosive value growth of major cryptocurrencies such as bitcoin and etherium this year. Nexon admitted it has bet on the high potential of the cryptocurrency business.
“NXC has sought investments in startups with valuable and promising ideas and technologies,” a Nexon official said. “We have pushed for the acquisition of Korbit on the potential of the cryptocurrency industry.”
Established in July 2013, Korbit is the first cryptocurrency exchange in Korea and is considered the third-largest following Bithumb and Coinone. It has more than 30,000 registered members and posted 700 million won in sales and 800 million won in operating loss last year.
Despite the low profitability as of now, the cryptocurrency exchange business is considered to have high potential for growth. An estimated 2 trillion won worth of cryptocurrencies are traded every day in Korea and this is 70 times more than it was a year ago, according to industry sources. This means that Nexon may gain handsome profits by charging commissions for each trade.
However, the company said it doesn’t plan to directly rush into the cryptocurrency business. NXC said it is interested in blockchain technology to decide the investment.
Cryptocurrencies such as bitcoin are traded only based on a security technology called blockchain. The blockchain system is designed to divide trade records into virtual blocks and store them separately, not in a central server. For this reason, it can keep the trade record safe and transparent.
“We believe that the blockchain system will play a key role in the future in diverse areas,” an NXC official said. “But we are not saying that we are entering the cryptocurrency business right now.”
In a move to diversify its business portfolio, NXC has invested in non-game businesses. It acquired Norwegian children’s furniture and accessories maker Stokke and online Lego trader BrickLink in 2013. It also invested 100 billion won in the social commerce enterprise WeMakePrice in 2015.