On 22 January 2019, CNBC reported that Bthmb Holdings, a Singapore-based crypto firm which holds a controlling stake in major crypto exchange Bithumb, is planning to acquire a publicly traded company in the U.S. as a ‘shortcut’ to go public in the country.
An unspecified source told CNBC that BTHMB Holdings had considered to go public through the traditional process of applying for an Initial Public Offereing (IPO), but decided to utilise a method capable of accelerating the process called a reverse merger instead. A reverse merger is the acquisition of a publicly listed company in order to make a private company public.
The reverse merger deal will be done between BTHMB Holdings and Blockchain Industries, a crypto and blockchain-focused investment firm. Blockchain Industries announced that both companies signed a binding letter of intent agreement, and once the deal passes through, the merged alliance will be named as Blockchain Exchange Alliance (BXA), becoming the first crypto exchange to go public in the U.S.
The move is very similar to that of Mike Novogratz’s method to get his crypto investment bank listed in Canada. He first bought a crypto start-up named Coin Capital and reverse merged with Bradmer Pharmaceuticals, a Canadian shell company. The alliance, now known as Galaxy Digital Holdings, trades on the TSX Venture Exchange.
The currently ongoing deal between BTHMB Holdings and Blockchain Industries, which is still under diligence review by related parties and have its terms and valuations finalized, is planned to be completed by 1 March 2019. Additionally, BTHMB Holdings agreed to place $1 million into an escrow account as a deal consideration, showing its immense interest in the reverse merge.
Both firms seek to gain benefits from the deal, with BTHMB Holdings hoping to expand its business premise to North America through the deal and Blockchain Industries aiming to bring better services for its users. Patrick Moynihan, the CEO of Blockchain Industries, stated that he expected the deal to provide the blockchain industry with “liquidity, accessibility and expansion”. He further added that the firm aimed to “bring more advanced technology and better compliance practices into the public marketplace” through the unification with BTHMB Holdings to form BXA.
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