Bithumb

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Bithumb
Bithumblogo.jpg
Founded 2014
Headquarters Seoul, South Korea
Key People Jae Won Choi, CEO
Products Cryptocurrency Exchange
Twitter @BithumbOfficial
LinkedIn Profile
Website Bithumb Home
Releases Company News
Blog Bithumb Blog

Bithumb is a cryptocurrency exchange based in Seoul, South Korea.[1]

Products and Services

Bithumb is the largest cryptocurrency exchange in South Korea as of October 2018.[2] It offers thirty-one cryptocurrencies and digital token trading against the Korean won on its platform. There is no other fiat currency used in its trading services.[3] Bithumb provides additional payment and other services focused on its Korean users.[4]

=== Ortus Cryptocurrency

OTC Trading ===

On Thursday, February 8, 2019, Bithumb launched a cryptocurrency over-the-counter trading desk in Hong Kong called Ortus. It described Ortus as a "block deal, matchmaking service" for institutional clients. Customers applying to use Ortus have to go through a "strict" onboarding process, which includes KYC and AML documentation, according to representatives from Ortus. It also offers insured custody and transfers from a U.S.-based bank account.[5]

History

Bithumb was the victim of a major breach on June 29, 2017 when an employee's personal PC was compromised and customer information was stolen. Reportedly, "billions" of won (the fiat currency of South Korea) worth of bitcoin went missing from customers' accounts, although it should be noted that 1 billion KRW was worth less than $1 million at the time.[6] In May 2018, Bithumb announced that it would no longer accept accounts from 11 named nations due to concerns about money laundering.[7]

On March 30, 2019, Bithumb reported that it had been hacked the previous evening. It said it lost about 4.02 million EOS, worth about $13 million at the time, from its own hot wallet. On April 1 CoinDesk reported that the hacker had stolen an additional $6.2 million worth of XRP (Ripple). [8]

Litigation

Bithumb was sued by 30-year-old Ahn Park, a South Korean citizen, for allegedly allowing hackers to steal 400 million won (about $355,000) from his personal Bithumb wallet, which took place in November 2017. Park accused the exchange of not having proper security measures in place. He argued that had the exchange provided adequate security measures, the theft would not have happened. He referenced another security breach Bithumb experienced earlier in 2017, in which the account information of 30,000 Bithumb users, as well as some Bithumb employees, were leaked. Park claimed this was likely how the hackers gained access to his account, and that Bithumb should have taken the necessary measures to mitigate the damage from the attack. He also said that Bithumb should be held to the same security standards as financial firms in South Korea. Bithumb argued that it could not be found at fault because it did not offer asset management or similar financial services. "According to the Electronic Financial Transactions Act," the company said, "Bithumb is not responsible for compensation because it is not a financial company, an electronic financier, or an electronic financial assistant…Since we have strengthened our security policy since the leak of personal information, we have fulfilled our obligation to be a diligent manager.”

In December 2018, a judge of the South Korean court system ruled in favor of Bithumb, agreeing that the company should not be considered a financial services company. The judge said that cryptocurrency is “mainly used as speculative means, so it cannot be regarded as an electronic means of payment.” The judge also said Bithumb had honored its fiduciary duty by sending Park several SMS messages informing him of the transactions that the hacker or hackers had made on his account.[9][10]

Reverse Merger with Blockchain Industries

On January 22, 2019, BTHMB, the holding company of Bithumb, announced that it had signed a binding letter of intent to merge with the U.S.-based publicly-traded company, Blockchain Industries, a cryptocurrency investment firm that offers its customers over-the-counter cryptocurrency trading services. This "reverse merger" would allow Bithumb to go public without conducting an initial public offering (IPO) since the resulting entity from the merger acquired a controlling stake in Bithumb. The acquisition is expected to be completed by March 1st. Once it is, the two entities plan to call themselves the "Blockchain Exchange Alliance (BXA)." People familiar with the matter told CNBC that the BXA later plans to "up-list," or move from over-the-counter markets to trading institutions like the New York Stock Exchange or Nasdaq. If this move is successful, it could make Bithumb the first publicly-listed cryptocurrency exchange.[11][12]

References