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| The logo of Bithumb is seen in this file photo. Yonhap |
By Lee Min-hyung
FTX's planned acquisition of Bithumb, the second-largest crypto exchange in Korea, is expected to hit a snag due to ongoing legal issues surrounding the exchange's top management.
Lee Jung-hoon, the former chairman of Bithumb Holdings, is on trial for charges of fraud after BK Group dropped its plans to acquire the crypto exchange. According to the prosecution, Lee allegedly took $100 million from BK Group Chairman Kim Byung-gun, who is a plastic surgeon, in exchange for the joint management of Bithumb and the promise to issue a new coin at the exchange.
The single-largest shareholder of Bithumb's parent company is Vidente. The Kosdaq-listed company has a 34.22-percent stake in Bithumb Holdings.
But Lee is seen by many as the de facto owner of Bithumb, considering all of the stakes linked to him. Lee has secured more than a 60-percent stake in Bithumb Holdings by means of DAA, a company he is known to own. DAA has around a 30-percent stake in Bithumb Holdings.
The top management's legal risk and the complex governance structure come as a major risk factor to the U.S.-based crypto giant. Both FTX and Bithumb did not share details of the ongoing deal, but Vidente recently confirmed that FTX and Bithumb have contacted each other about the possible acquisition deal.
"We cannot say anything over the issue for the time being," an official from Bithumb said, declining to comment further.
Last year, NXC, the holding company of Nexon, sought to acquire Lee's stake in Bithumb for 500 billion won, but the deal fell through.
The general tendency is that a potential buyer will cut the price of a takeover deal if the top management of the seller is facing legal issues. Nothing specific has been confirmed over the value of the deal, but talks are known to be still underway over a price tag of around 4 trillion won.
Bithumb's sales soared in 2021 due to booming market sentiment at the time. The company generated sales of 1 trillion won last year and an operating profit of 782.1 billion won during the same period. Net profit reached 648.3 billion won.
But the company's earnings are forecast to plunge this year amid lackluster crypto market conditions here and abroad. According to data from CoinGecko, Bithumb's daily transaction volume soared to around 4 trillion won as of the end of November last year, but the figure had nosedived to around 600 billion won as of July 26.
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