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Chinese crypto exchange Huobi is set to take over the reins of Bithumb, according to reports. The Korean news outlet, The Bell, revealed today that Huobi had expressed an interest in purchasing Bithumb.
Bithumb is the largest crypto exchange in Korea and has been actively looking for a buyer since a takeover deal collapsed in September. The report further says that Huobi could take a majority stake in the Korean exchange.
It is also understood that shareholders of Bithumb parent company, Bithumb Holdings want to sell their stake in the company. At the moment, Bithumb Holdings owns 100% of Bithumb, and if a deal with Huobi goes through, the Chinese exchange would own a controlling share of the company.
Acquisition Crucial to Circumvent New Regulations
The report also claims that the new regulations put forward by the Korean government may have forced Huobi’s hand. The firm currently offers services in the country as Huobi Korea but does not offer real-name and social security number-verified banking services.
The new regulations that will come into operation in March 2021 say that real name banking services protocol is mandatory. This rule caused an uproar in Korea’s crypto community as many exchanges may be forced to shut down.
At the moment, only the top four crypto exchanges in Korea, which include Bithumb, Coinone, Upbit, and Korbit, use real-name banking systems. Thus the takeover of Bithumb by Huobi makes perfect business sense.
Huobi will be able to circumvent the new rule by merging Huobi Korea with Bithumb. It could also allow Huobi Korea to continue trading using the Bithumb trademark. Huobi could face competition as a broadcasting company is believed to have participated in the sale. The company is said to be expanding its business into blockchain technology.
Despite this, Huobi remains a favorite to secure the deal, which would be a huge one for the crypto community. At the time of publication, Bithumb trading volume stands at $306 million, while Huobi Global is around $8 billion.