Virtual asset exchange Bithumb is pushing to list this year, but analysts say a red light has come on for its goal due to the wrongful payment of bitcoin worth 62 trillion won and fines of 36.8 billion won. The wrongful bitcoin payments and the fines can be seen as signs of weak internal controls and could become obstacles in the preliminary review for listing.
According to the financial sector on the 24th, Bithumb has been taking various steps to list in April this year, starting with selecting Samsung Securities as lead underwriter in 2023, but major setbacks have piled up since the start of the year.
The wrongful bitcoin payment incident that occurred in early February has not been fully resolved. According to materials that People Power Party lawmaker Lee Heon-seung received from Bithumb, Bithumb failed to recover about 18 out of the existing 1,788 unrecovered bitcoins. The current price of bitcoin is around 100 million won per coin.
Bithumb tried to pay 620,000 won to event winners but made a mistake by entering "bitcoin" instead of "won." Financial Supervisory Service Governor Lee Chan-jin said at a media briefing last month, "It is clear that the wrongly paid bitcoin is subject to the return of unjust enrichment. For those who sold and converted it to cash, it is a 'disaster' as they could get entangled in lawsuits."
On the 16th, Bithumb also received penalties of fines totaling 36.8 billion won and a six-month partial suspension of business for violating the Act on Reporting and Using Specified Financial Transaction Information. In the preliminary review for listing, the Korea Exchange (KRX) uses the adequacy of internal control systems and management stability as key evaluation criteria, so the wrongful bitcoin payment incident could be an obstacle to the listing.
Another variable is the second-phase virtual asset law (Digital Asset Basic Act) being pushed by the government and the ruling party. Under the bill, Bithumb must align its controlling shareholder's equity to 20% within three years under the rule limiting controlling shareholders' stakes in virtual asset exchanges. Bithumb's largest shareholder is Bithumb Holdings, which currently holds a 73% equity stake.
An industry official said, "The virtual asset industry does not know what will be included in the Digital Asset Basic Act, so it cannot embark on new initiatives right now. For Bithumb, which is pursuing a listing, the uncertainty will be even greater."