BTHMB Holdings, the Singapore-based owner of cryptocurrency exchange platform Bithumb, will be merging with Blockchain industries. Bithumb, which is in the process of being renamed Blockchain Exchange Alliance (BXA), has set its sights on floating an Initial Public Offering (IPO) in the United States, and his merger with the publicly traded Blockchain Industries, is seen as the first step in achieving this objective.
According to an announcement made by Blockchain Industries on January 22, the two companies have signed a letter of intent, implying an impending merger and the formation of a separate entity, with the aim of becoming the very first publicly traded cryptocurrency exchange platform in the world.
Dr. Kim Byung-gun, CEO of BTHMB/BXA explained in the release:
BXA is a global exchange alliance, and the United States is a key factor to any global initiative. By unifying our businesses, we benefit from the focused expertise of Blockchain Industries. As a result, we have tremendous growth opportunities in this region, and we expect quality results from this in North America.
Speeding up the Listing Process
Just as Bithumb is popular in the crypto sector in Asia, Blockchain Industries is known in the U.S. as a publicly traded diversified holding company that trades in the over-the-counter (OTC) market. Essentially, this new deal will allow Blockchain Exchange Alliance to conduct a reverse merger with Blockchain Industries, which is expected to speed up the process of securing public listing, as opposed to making a listing application with a traditional IPO in Asia.
The Reverse Merger
A reverse merger is a somewhat unconventional way of gaining entry into the public markets. Billionaire Mike Novogratz used the same reverse merger technique when he initiated the takeover of Canadian shell company Bradmer Pharmaceuticals to list his company, Galaxy Digital, on the Canadian TSX Venture Exchange.
It has been reported that Blockchain Exchange Alliance has already completed public listing in BTHMB’s Singapore base, but the company is somewhat unwilling to wait a year or two before securing listing in the United States through an IPO.
In addition to the merger, the new entity is looking to “up list,” which means that it would move from over-the-counter markets (which are known majorly for trading in cheaper penny stocks) to the big leagues of the Nasdaq or the New York Stock Exchange (NYSE.) However, the process of up listing would require that Blockchain Exchange Alliance meets much sterner requirements.
Also, Blockchain Exchange Alliance is reportedly looking at a possible consolidation and purchase of the worldwide cryptocurrency exchange industry, hence the “Exchange Alliance” affixation in the formed entity’s name.
The group reportedly plans to gain control of up to nine other crypto exchange platforms by the end of the year, with the number increasing to 40 by the end of 2020.
The news of the merger is coming just a few months after it was reported that Bithumb had sold about 38 percent of its ownership rights to BK Global Consortium, a consortium based in Singapore. Owned by plastic surgeon Byung Gun Kim, BK Global Consortium bought the shares of Bithumb for 400 billion won (about $350 million at the time).
BK Global reportedly bought 50 percent of BTC Holdings Company, which owned 76 percent of Bithumb’s equity. The completion of the transaction made BK Global the largest controller of Bithumb.