A holding company based in Singapore, BTHMB, has announced that it would be getting US listing by purchasing a publicly traded company, Blockchain Industries. Blockchain Industries is a publicly traded company that offers OTC services under the BCII ticker. It has just signed a binding intent letter with BTHMB. The deal will rename BTHMB as Blockchain Exchange Alliance. The reverse merger will allow BTHMB to penetrate the United States public markets faster than IPOs would. According to a source familiar with the matter, Blockchain Exchange Alliance initially considered getting listed in Singapore but that would have meant waiting for one or two years to finish an IPO round.
Blockchain Exchange Alliance
Blockchain Exchange Alliance
By combining resources, both companies will up-list. This means that they will progress from OTC markets to Nasdaq or the New York Stock Exchange. However, the company will need to meet up with the listing requirements in the United States stock market. This merger will make Blockchain Exchange Alliance the majority of both companies.
Bitcoin (BTC) Price Today – BTC / USD
Keep in mind that this isn’t the first time the reverse merger move is being used by a cryptocurrency-related firm. Some time ago, Mike Novogratz, former hedge-fund manager who is now a cryptocurrency mogul, used the reverse merger tactic to get his cryptocurrency merchant bank listed on the Canadian stock market. He started by buying Coin Capital, a Canadian cryptocurrency startup after which he renamed the company which now trades as Galaxy Digital Holdings Ltd on the Canadian stock market. Unfortunately, the bearish pressure in the market in 2018 cost the company $134 million. The Galaxy Digital shares dropped by 36% since its debut.
Blockchain Exchange Alliance, however, is making plans to move beyond Bitcoin. It is going to subsequently consolidate and buy more exchanges on a global scale aiming at nine exchanges by the end of 2019 and 40 by the end of 2020.
Blockchain Exchange Alliance Acquires Controlling Interest In Controversial Bithumb
Since Blockchain Exchange Alliance acquired a controlling shares in Bithumb Holdings, it now has interest in Bithumb Korea. Bithumb is the second-largest cryptocurrency exchange in the world per volume. In November 2018, it briefly became the largest exchange in the world according to the data from CoinMarketCapital. However, it shortly gave the position back to Binance.
There have been some controversy about the exchange in the past. Last month, CER, an exchange rating service claimed that Bithumb was generating fake trading volume. This accusation wasn’t unfounded. Bithumb was ranked in the top 10 during the summer months but suddenly moved to the second position in November and eventually became first per trading volume. The exchange rating service accused Bithumb of buying and selling cryptocurrencies at the same time to create artificial trading volume.
Bithumb was also caught up in a high profile hack that cost it $31 million in June 2018. Following the attack, trading activities were suspended and user funds were transferred to a cold storage. It also announced that the stolen funds will be covered from its reserves. After a while, trading resumed.
Do you think being affiliated with Bithumb will affect the credibility of the Blockchain Exchange Alliance?