Bithumb has been pushing to become one of the biggest crypto exchanges in the world, and with this new reverse merger it could fast track that process. Blockchain Industries – an American publicly listed company – has signed a binding letter of intent to merge with Bithumb. The bold move will help Bithumb skirt round many lengthy processes and will fast track its process of getting listed and raising funds from investors.
What is a Reverse Merger?
Reverse mergers aren’t very common due to the fact once you’re publicly traded there is very little sense in selling out to a private company. After the reverse merger is completed, Bithumb will essentially be listed in America as a publicly traded company. It’s a brilliant way to skirt around the stringent regulations that are placed on an IPO – perhaps Bitmain should take note. It’s a very unconventional and uncommon way of going private, but nonetheless is still legal.
Only a Penny Stock… For Now At Least
No firm on a top exchange – like the NASDAQ or London Stock Exchange – would consider a reverse merger, as they are generally well-set firms with solid business models. However, small pink sheet firms that trade for pennies are often open to the move. It will allow them to jump from the minor league all the way up to the major league thanks to the weight the new firm carries. Bithumb has paired up with a penny stock firm, but once the reverse merger is completed, it will be able to change its listing to a bigger exchange with relative ease.
Bithumb Winning in Court
Midway through the merger talks, Bithumb was dragged into court by a trader who claims a hack caused him to lose $355,000. However, it turns out the trader’s details were not up to date and it was his own fault that the $355,000 was stolen. His lax account security combined with incorrectly configured alerts meant the warnings were never seen – leading the exchange to believe everything was above board. The court sided with Bithumb in an overwhelming show of strength.
Times appears to be good for Bithumb as it rolls out new payment partnerships and signs new contracts to expand around the globe. It won’t be long before the reverse merger is completed, from there Bithumb under the name of Blockchain Industries will be moving up to the top tier NASDAQ exchange in the coming months.
