Bithumb, South Korea’s largest exchange, decided to issue its own coin in an ICO sale it will hold in Singapore to avoid coming under the scrutiny of its home country’s government.
2 hrs ago
Bithumb, the fifth largest cryptocurrency exchange by volume in the world and the largest in South Korea, just announced plans to issue its own coin, which it will call Bithumb Coin.
TokenPost, a South Korean cryptocurrency publication, reported that the coin will be part of an ICO which will be run out of Singapore.
It may seem puzzling for Bithumb to launch its ICO there instead of doing so in its home country, but South Korea recently banned these financial instruments because of their lack of oversight.
Regulators argue that these kinds of investments enter the jurisdiction of the Lending Act due to the government’s perception of ICOs as credit schemes.
“We know that the Bithumb coin is underway at a local subsidiary acquired by Bithumb’s subsidiary. Details such as the specific schedule and size have not yet been confirmed,” said a spokesperson for Bithumb.
This isn’t the first time that cryptocurrency exchanges have offered their own tokens. Earlier in 2018, Huobi—an exchange in China—offered the Huobi Token, an ERC20 coin. Binance and Kucoin have also joined the party.
Binance’s coin (BNB) is one example of how a cryptocurrency exchange can leverage its own token to boost its profile.
The exchange carefully chooses promising coins to pair it with BNB, creating a strengthened ecosystem that helps boost Binance’s liquidity.
This might be Bithumb’s goal after seeing how other exchanges have seen various levels of success with such an experiment.
The ICO ban in South Korea seems to have failed to stop companies from fundraising through this method. To circumvent the legal wall, they simply announce their projects elsewhere.
ICON (ICX), for example, is a South Korean coin initiative that started its sale in Switzerland to avoid coming under the hammer of local authorities.
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