Kiwoom Securities seeks to buy shares in Bithumb

Kiwoom Securities, a major South Korean securities broker, wants to acquire an equity stake in Bithumb, the second largest crypto exchange in South Korea. The two parties are in talks about a so-called third-party allotment of new shares: if Bithumb issues new shares, Kiwoom Securities will buy them. The exact size of the stake and the investment amount are still being negotiated. Reports Chosun Biz.

South Korean securities firms dive into the crypto market en masse

Kiwoom Securities is not the only major player eyeing a Korean crypto exchange. Earlier, Samsung, Mirae Asset and Korea Investment & Securities Co. also expressed interest in acquiring stakes in crypto exchanges. The timing is no coincidence: South Korean securities firms want to position themselves before the market further institutionalises, partly due to the expected introduction of rules around security token offerings (STOs) and stablecoins.

According to sources from investment banking and the crypto sector, Kiwoom Securities and Bithumb are currently discussing the terms of the deal. Details about the size of the stake and the total investment amount are still being worked out.

Regulator wants to cap equity stakes at 34%

The potential deal takes place against a backdrop of upcoming regulation. The South Korean financial regulator FSC is discussing new rules that would in principle limit large shareholders in crypto exchanges to a maximum stake of 20%, with an exception up to 34% under certain conditions.

That is a major challenge for Bithumb Holdings, which currently holds 73.56% of Bithumb. If the rules are implemented, the company will have to divest more than 50 percentage points of its stake. The talks with Kiwoom Securities thus fit into a broader pattern in which Bithumb is already preparing its shareholder structure for the new regulations.