Blockchain Industries Inc. has confirmed of having signed a “binding letter of intent” to hold a reverse merger, also known as reverse IPO, with Singapore-based BTHMB Holdings Pte Ltd. BTHMB is the holding company for the well-known crypto exchange Bithumb.
The reverse merger usually takes place majority shares in a publicly owned company listed by its respective investors. The recent development is in line with the company’s process to get the private company listed on the US stock exchange board.
The new company thus formed will be called the Blockchain Exchange Alliance (BXA) and would be the first publicly traded crypto company. Besides that, getting the company listed on the exchange list the merger would also help solve certain problems pertaining to the digital currency exchanges like liquidity, expansion, and accessibility. As per the company’s statement, the merger all at once led to the development of a unified and a securer international exchange platform with a wide capacity to support up-and-coming blockchain e-commerce, digital finance functions, and payment gateways.
Bithumb has already secured $1 million into escrow for the onset of the deal. Nevertheless, the collaboration is yet under review and a final decision is required to be taken pertaining to the terms of the agreement as well as the valuation of the company. The merger is planned to be completed by 1st March 2019.
Since June 2018, Bithumb of late has been scrutinized for a number of reasons. Back in June, the exchange was hacked and crypto worth of nearly $31.5 million was stolen. The same year in December, a Ukrainian exchange ranking service accused the exchange of wash trading, a process by which artificial trade volume and heighten perceived demand is created.
In response to the accusation, Bithumb said that it has not done anything wrong to inflate the trade volume. The company reportedly said that it is not involved in the selling of mining-based coins. The company is trying to add more customers to its portfolio by marketing itself like any other company in the industry.
The latest development is in line with the company’s efforts to attain a profitable condition in the market. The company, however, has not leaked the financial terms of the deal but it is hoped that the company will officially reveal the details in the near future.
The singing of the reverse IPO is similar to certain deals signed in 2018 by investor Michael Novogratz who used the deal to merge Galaxy Digital, the crypto merchant bank, with Canada-based Bradmer Pharmaceuticals as it aimed to get the company listed in Canada.