Controversy Looms Over Bithumb Coins
South Korean cryptocurrency exchange Bithumb is reportedly re-evaluating its strategy to launch its own coins through a corporation in Singapore, following news of fraud that could have serious side effects to both companies. Under the current laws, Bithumb coins will still be subject to Korean regulation whether launched abroad or not.
One of South Korea’s largest cryptocurrency exchanges, Bithumb, had a plan to launch its own coins for institutional investors through a corporation in Singapore.
On Tuesday, Bithumb confirmed that it is collaborating with Singaporean company B.Buster to “build a global [crypto] payment system.” The project is known as BTHB. “We received some investment from Bithumb to proceed with the project. Through a contract to use the trademark, [we have] prepared the project name “Bithumb Coin,” B.Buster explained.
However, local media reported on Wednesday that the companies are now re-evaluating this strategy.
The tokens were going to be issued by B.Buster, according to Sedaily, noting that the company is “re-examining” the project after hearing “news of the issuance of the coins abroad, the coin resale, and investment recruitment fraud” related to the unlaunched coins.
As soon as rumors that Bithumb was going to issue its own cryptocurrency circulated in the crypto community, ICO investor recruitment began in the market, Daum described. Etherscan, which provides data about Ethereum-based tokens, currently shows 2 Bithumb coin listings: 10 billion Bithumb Coin (BTHB) and 1 billion Bithumb Coin Point (BTHP). Bithumb denied having knowledge of these listings, the news outlet detailed.
Reconsidering Not Terminating
Prior to the re-evaluation, B.Buster said “We have limited resale and distribution until the listing on the exchange,” the news outlet noted. However, if B.Buster is selling to general investors and not to institutions, it “would be a breach of contract” with Bithumb, the publication pointed out. “In the meantime, the rumors spread and more investors are getting more and more concerned about the investors’ protection, which is why the ‘reassessment’ position was revealed.”
According to the news outlet, Bithumb and B.Buster expect to be “issuing a coin in the end,” calling the project a “reconsideration” rather than a termination.
B.Buster reportedly announced on Wednesday, “There will be no public sale for the ‘BTHB’ project. Only selected institutional investors are allowed to participate, excluding citizens/entities of the Republic of Korea and People’s Republic of China, and citizens/entities/residents of the United States of America.” The company noted that “Any sale at this point is only to institutional investors” that it is already in touch with. “Please beware of scammers and impersonators” pretending to be the company or its affiliated entities, B.Buster reportedly warned.
Korean Laws Still Apply
The financial authorities have warned that domestic cryptocurrency exchanges issuing and promoting their own tokens could have “serious side effects such as internal price manipulation,” Money Today reported, adding:
The current law also makes it clear that Bithumb coins are subject to [Korean] regulation. Under the Electronic Money Act coins whose value fluctuates like virtual currency cannot be a means of payment.
Recently, Kakao Corp was also rumored to be launching an ICO abroad. The Korean Financial Services Commission (FSC) also warned that the company’s ICO, if launched, would still be subject to Korean laws and could have an adverse impact on its Korean subsidiaries.
What do you think of Bithumb launching its own coins? Let us know in the comments section below.
Images courtesy of Shutterstock, Bithumb, and Etherscan.
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