Domestic virtual asset exchange Bithumb decided to increase executive compensation limits and consider entry into the lend business at its shareholders' meeting.
Bithumb held its shareholders' meeting on the morning of the 31st. The main agenda included reappointing Vice President Lee Jung-a, from the shareholder side Vidente's Lim Jeong-geun, and Director Ko Du-min as internal directors, and changing the articles of incorporation to add 'lend and lend brokerage' to its business purposes. In addition, a proposal to quadruple the director compensation limit from 5 billion won to 20 billion won and to double the auditor compensation limit from the current 500 million won to 1 billion won was also presented and passed.
Bithumb explained that the increase in compensation limits is a response to the significant improvement in its performance due to the boom in the virtual asset market. The compensation limits for directors and auditors at competitors Upbit's operator Dunamu are 20 billion won and 500 million won, respectively.
Despite the record performance of the virtual asset industry, there was no agenda item for increasing dividends to enhance shareholder value. At Upbit's shareholders' meeting on the 28th, a proposal to distribute 8,777 won per common share was approved, which is about three times the 2,937 won per share from a year ago, marking a record-high dividend amount. When asked about dividends at Bithumb's shareholders' meeting that day, the company responded that it is considering enhancing shareholder value through listings rather than dividends.
Regarding the lend business added to its business purposes, the industry interprets it as possibly related to Bithumb's current price prediction service 'lending.' Lending is a service that allows investors to borrow the same virtual asset using the virtual assets they hold as collateral to invest in the rise and fall of the assets. In terms of product characteristics, it looks like an off-exchange derivative under capital market law that entails using leverage to invest, but due to the lack of clear legal regulations on virtual assets, it is difficult for financial authorities to impose regulations on products or sellers.
Lending is a service provided in partnership with the lending company Block to Real. However, Block to Real only has qualifications for lend and asset management and does not hold virtual asset operator status from the Financial Services Commission (FSC). The FSC has recommended that domestic investors transact only with those holding virtual asset operator status, which has raised safety concerns.
If Bithumb starts the lend business, it could not only lend existing virtual assets but also won, encouraging investment in virtual assets, and could secure qualifications for asset lending that were previously entrusted solely to partner companies. Bithumb explained the reason for adding lend business to its business purpose as 'a preparatory measure to respond along with the current market volatility and financial industry.'
In this regard, a Financial Supervisory Service (FSS) official noted, 'It is true that Bithumb's lending service is in an ambiguous state that is difficult to regulate due to the limitations of the current guidelines,' and added, 'because of this, authorities have advised Bithumb to avoid excessive promotion of the service.' He explained, 'I checked because it seemed that the lend business would be connected to lending, but they said there are currently no plans to start; we will continue to monitor the situation.'
Meanwhile, on the same day, Bithumb announced its plans for an initial public offering (IPO) this year at the shareholders' meeting. Bithumb aims for a listing in the second half of the year, with Samsung Securities as the lead manager, and is also considering listing overseas (on NASDAQ). Recently, the possibility of a backdoor listing was raised again after Bithumb's founder Lee Jeong-hoon was acquitted of fraud charges amounting to 110 billion won, but the company indicated that there would be no backdoor listing.