FTX Rumored to Be in Talks to Purchase South Korean Exchange Bithumb

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FTX Rumored to Be in Talks to Purchase South Korean Exchange Bithumb
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FTX is rumored to be in talks with South Korean exchange Bithumb over a possible acquisition.

Negotiations are at an advanced stage and have been ongoing for the past few months, one of the sources said. Bithumb said it could not confirm this information, while FTX declined to comment for this story. Since Bithumb is a potential acquisition rather than an investment, it makes sense that talks will take place within a few months, allowing the company to conduct due diligence before taking the plunge.

Bithumb has recently made headlines as it is one of many South Korean exchanges that has come under fire from state authorities for its alleged ties to the now-infamous Terraform Labs co-founder Do Kwon, who invented the failed TerraUSD stablecoin.

According to the Southern District Prosecutor’s Office, 81 retail investors filed two formal complaints with the authorities.

Minergate

Antitrust issues brewing?

Bithumb is licensed by the Financial Intelligence Unit to operate a digital asset business that converts cash into cryptocurrencies. The exchange, which has a daily trading volume of around $569 million, was founded in 2014 and registered on November 19, 2021.

It is unclear whether any acquisition by FTX would raise antitrust concerns. Last year, Bithumb ran afoul of antitrust authorities when it became one of a dozen South Korean crypto companies deemed to have exclusivity reasons, exempting them from compensating customers for damages.

Bithumb becomes the third overseas exchange in a short period of time

If the rumors are true, Bithumb would be the latest acquisition in a nearly $1 billion spending spree that FTX and FTX.US will begin in June 2022.

American entity FTX US recently signed a deal with cryptocurrency lender BlockFi for a potential acquisition of $240 million. FTX has acquired Japanese exchange Liquid and Canadian trading platform Bitvo. At the time, FTX CEO Sam Bankman-Fried said in a statement that the acquisition of the Canadian exchange expanded the company’s regulatory reach in different regions.

FTX has borrowed $485 million from crypto brokerage Voyager Digital in two days of negotiations. Bankman-Fried insisted that the loans to Voyager were made to protect customer assets, not to try to improve the company’s bottom line.

But some did not embrace the benevolent narrative. Chris Mann, general partner at Race Capital, an early investor in FTX, said Bankman-Fried’s investment exposed his ambitions to dominate the industry.

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