Bithumb Korea Reassesses IPO Plans Amid Significant Revenue Drop in 2023
Summary:
Bithumb Korea, the operator of a South Korean cryptocurrency exchange, reported a 57% drop in annual revenue for 2023, attributed to the devaluation of cryptocurrencies. Despite this, the firm focused on boosting its services. The financial downturn coincided with the announcement of Crypto.com's potential rival app launch in South Korea. Previously aiming to be the first digital asset company to go public in the country, Bithumb is reconsidering its IPO plans due to internal strategic reassessments and evolving regulations.
Bithumb Korea, a prominent South Korean cryptocurrency exchange operator, recently reported a significant 57% drop in its annual revenue for the financial year 2023. Annual sales revenue for the Seoul-based exchange plummeted to 1,358 billion won in 2023, marking a 57.6% decrease from the previous year's 3,201 billion won, as noted in a report by Newdaily on April 2. Bithumb's net profit also fell sharply by 74.5% to 243 billion won in 2023, down from 954 billion a year earlier. Despite the staggering losses, the firm maintained a surplus for the fourth consecutive year.
The predominant cause of the financial downturn is attributed to the devaluation of cryptocurrencies that occurred during the crypto winter, Bithumb disclosed. Additionally, the company implemented a zero-fee trading policy during the last quarter of the year, which further compounded their revenue drop.
Despite these challenging market conditions, the exchange has continued its endeavors to expand its reach across South Korea in the previous year. A representative of Bithumb assured that they will persist in enhancing their services to promote performance advancement, as reported by Newdaily.
Bithumb's financial problems coincided with the announcement by Crypto.com of its cryptocurrency trading app launch for South Korean retail investors starting April 29, which could potentially rival Bithumb's market share.
Rumors circulated at the start of November 2023, suggesting that Bithumb aimed to become the inaugural digital asset enterprise to undergo a public listing on the South Korean stock market. The exchange reportedly planned an initial public offering (IPO) on the Kosdaq, South Korea’s equivalent to the U.S. Nasdaq, in the latter half of 2025.
These rumors gained credibility as Bithumb Korea began establishing a non-exchange business to expedite its stock market entrance. However, following scrutiny over former Chairman Lee Jeong-hoon's position within the company, Bithumb has rethought its IPO aspirations.
This decision was not influenced by potential legal complications concerning Chairman Lee, Bithumb officials clarified, but rather a need to reevaluate their organizational strategies amidst a shifting institutional environment.
This development arose after the Financial Services Commission (FSC) in South Korea devised a new amendment requiring incoming heads of new crypto firms to obtain regulatory approval before assuming their roles. If approved, new executives will be unable to assume their roles until receiving official endorsement from the FSC.
Published At
4/3/2024 12:36:15 PM
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