According to a January 22nd press release, the Singapore based holding firm, BITHMB, which holds a controlling stake in one of the leading cryptocurrency exchanges Bithumb, is looking to go public in the United States through a reverse-merger route. This is when a private company acquires a publicly listed company in order to bypass the complicated and protracted process of a conventional IPO.
Why Bithumb Wants A Reverse Merger
Acquiring a publicly-traded company, or a reverse merger, can be a speedier way to take a company public than a traditional Initial Public Offering (IPO). The publicly-traded holding company, Blockchain Industries, which trades on the US over-the-counter markets, has announced that it has a binding letter of intent with BTHMB, which is being renamed as Blockchain Exchange Alliance (BXA). Should the merger be a success, it will likely be the first instance of a cryptocurrency exchange going public.
An unnamed source mentioned by CNBC said that Blockchain Exchange Alliance had considered filing for a public offering in Singapore but were unwilling to wait for up to two years to complete an IPO. The source added that the combined company will eventually move from OTC markets to the New York Stock Exchange (NYSE) or Nasdaq.
More Advanced Blockchain Technology And Better Compliance
“By merging with BTHMB/BXA we expect to bring more advanced technology and better compliance practices into the public marketplace via a consolidated focus,” said Patrick Moynihan, CEO of Blockchain Industries, on the Bithumb reverse merger.
Blockchain Exchange Alliance allegedly has broader plans in crypto beyond Bitcoin. It plans on buying up and consolidating exchanges around the world and creating a global crypto exchange alliance.
Bithumb is no stranger to controversy. Cryptocurrency exchange rating and analytics service, CER, accused Bithumb of faking up to 94 percent of its trade volume since summer 2018. Bithumb denied all allegations. And in June last year, it was hacked for nearly $31 million but they later claimed they had reduced the losses to $17 million after retrieving some of the funds.