Kiwoom Securities Targets Bithumb Stake Amid South Korea’s Incoming Crypto Rules

Kiwoom Securities is reportedly eyeing a stake in Bithumb, joining a heated race among traditional finance firms to own a piece of South Korea’s digital asset service providers. The move comes as South Korea prepares for a raft of incoming crypto rules, with TradFi firms jostling to take advantage of the seismic changes.

Kiwoom Securities eyes a stake in Bithumb

According to a Chosun Biz report, South Korea-based online brokerage Kiwoom Securities is inching closer to owning a portion of Bithumb, a leading cryptocurrency exchange in the country. Per the report, both Kiwoom Securities and Bithumb are exploring a third-party allotment of new shares.

The private placement will see Kiwoom Securities snap up any new shares issued by Bithumb, giving the online brokerage a sizable ownership in the cryptocurrency exchange. However, the report did not disclose the exact acquisition equity ratio and investment size, while a timeline is still under wraps.

While not delving into specifics, a company spokesperson confirmed ongoing discussions with the traditional finance sector regarding a private placement. 

“We are discussing partnerships with the financial sector and several corporations across various possibilities, but nothing has been specifically reviewed or decided yet,” said a company spokesperson. 

The move comes as Bithumb nears a potential Initial Public Offering (IPO) in 2028, with the exchange restructuring its internal governance to meet regulatory guidelines. Already, incoming South Korean regulations will cap controlling shareholders of crypto exchanges at around 20% when they come into effect in 2027.

For now, Bithumb Holdings owns around 73% of Bithumb in a complicated shareholder structure. Lee Jung-hoon’s DAA and Vidente own 34% and 30% of Bithumb Holdings, respectively, with the rest split among minority shareholders.

Bithumb is Korea’s second-largest crypto exchange. Source: Kaiko

Korean firms jostle for local crypto exchanges

Emerging reports of Kiwoom Securities eyeing the acquisition of a stake in Bithumb continue a red-hot streak of South Korea’s traditional finance players turning their gaze to digital asset service providers.

At the tail end of May, Korea Investment & Securities (KIS) teamed up with OKX Ventures to purchase a 19.6% stake in Coinone. 

Previously, Mirae Asset Consulting acquired a 92% stake in South Korea-based Korbit for $93 million, while Hana Financial Group revealed plans to acquire a 6% stake in Upbit’s operator, Dunamu. Meanwhile, Samsung entities scooped up a 4% stake in Dunamu, in a deal worth a staggering $408 million. 

The frenzied rush comes as crypto operators scramble to sell a portion of their ownership to comply with incoming regulations, triggering a fire sale. Apart from snapping up forced equity divestments, traditional finance firms are eyeing a major corporate crypto and ETF boom once regulatory approval clears. 

Last week, South Korea’s KOSPI tanked by nearly 10%, potentially driving local brokerages to diversify beyond traditional equity revenue.