By One of the largest cryptocurrency exchanges by trading volume, Bithumb is considering going public in the USA by means of a reverse merger.
An investment company by the name of Blockchain Industries whose focus on the crypto and blockchain sector announced on Tuesday that they had signed a binding letter of intent agreement with BTHMB Holdings, the holding company of Bithumb which is based in Singapore, for the reverse merger deal.
What Is A Reverse Merger?
Also known as a reverse initial public offering (IPO), a reverse merger occurs when a private entity acquires a publicly listed company as a way of bypassing the complex and time-consuming process of a traditional IPO.
When the deal is completed, the new entity, comprised of the two companies, will be known as Blockchain Exchange Alliance (BXA) and could very well become the first US-listed cryptocurrency exchange. Both entities are in agreement that the deal will be completed as of March 1st as per the announcement.
The BTHMB & Blockchain Industries Merger Explained:
Notably, BTHMB Holdings has already agreed to invest $1 million into an escrow account as a consideration for the deal, which still has to go through due diligence review by both parties and a final agreement on terms and valuation has yet to be decided upon.
CEO of Blockchain Industries, Patrick Moynihan stated that he expects that the deal to bring “liquidity, accessibility and expansion” to the blockchain industry and added:
“By merging with BTHMB/BXA, we expect to bring more advanced technology and better compliance practices into the public marketplace via a consolidated focus.”
By utilising the completed deal, BTHMB Holdings has announced plans to expand their operations to the North American market, according to the statement.
This news comes mere months after Bithumb sold more than 38% of their ownership to Singapore-based consortium which is owned by Byung Gun Kim, a plastic surgeon. The 38% sold amounts to roughly $350 million.
In Tuesday’s statement. Kim said:
“By unifying our businesses, we benefit from the focused expertise of Blockchain Industries. As a result, … we expect quality results from this merger.”
Back in June 2018, Bithumb suffered the loss of nearly $31 million in digital assets due to falling victim to a hack. Later that month, the firm claimed that they had reduced the amount lost by retrieving some of the stolen funds, bringing down the initial loss to $17 million.
Michael Novogratz, a billionaire investor, also went down the reverse merger path last year when he merged his cryptocurrency merchant bank, Galaxy Digital with that of Bradmer Pharmaceuticals, a Toronto-listed shell corporation in order to be listed in Canada.
Could reverse mergers become the next popular move for crypto companies who are seeking to be listed? Let us know your thoughts by leaving a comment below.
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