Morgan Stanley Allegedly Bids on Bithumb Ownership Stake

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In Brief
  • Local media reports rumors of deal negotiation.

  • Bithumb is South Korea’s biggest cryptocurrency exchange.

  • This is one of a few deals possibly on the cards

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The investment bank, Morgan Stanley, is possibly negotiating the purchase of a stake in Bithumb. This is the largest cryptocurrency exchange in South Korea.

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Local media outlets Asiae and Naver first reported that the negotiations are with Bithumb shareholder Bident. The company owns around a 10.3% stake in the exchange. 

In addition, an anonymous source referred to as a “high-ranking official of Bithumb Holdings” confirmed, “Morgan Stanley participated in the Bithumb acquisition deal.” 

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Another insider source told Naver, “The reason Morgan Stanley used Bident is because it understood that Bident has the right to negotiate a preferred sale to acquire Bithumb Holdings.”

Interest in Bithumb is unsurprising. Apart from being the biggest exchange in the country, its market value is estimated to reach two trillion KRW (around $1.7 billion).  

However, despite all the insider scoops, Morgan Stanely has not confirmed or denied the existence of the negotiations. 

Bithumb’s History of Uncertain Deals

This is not the first major U.S bank with rumors tying it to Bithumb. JPMorgan Chase and derivatives exchange CME Group are also reportedly considering negotiations with the Bithumb as well. 

In January, local gaming group Nexon reportedly signed a memorandum of understanding with the exchange. This outlined a deal to acquire a ~65% stake. The progression of these negotiations has become unclear as Nexon denied them outright. 

In 2018, a deal with BK Global Consortium fell through. This was due to a lack of investor funds. The deal at the time was for an estimated $353 million. 

Legal troubles have also contributed to the exchange’s sale troubles.

In 2020, authorities raided its offices in a search and seizure. This was in relation to an ongoing fraud investigation into its chairman Lee Jung-hoon.

Investors are accusing Jung-hoon of misleading them regarding the listing of a new token. Bithumb planned on listing The Blockchain Exchange Alliance token following the acquisition by BK Global. 

After raising $25 million in an ICO funding round, the Bithumb-BK Global deal fell through and the token was never listed. 

Investors are claiming fraud as a result of lost profits due to the failed deal. 

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After working in news and lifestyle journalism, Leila decided to bring her interest in cryptocurrencies and blockchain to her day job. She now runs the Features and Opinions desk at BeinCrypto which fits perfectly with her enthusiasm for crypto's social and political impact.

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