BXA and the Problem With BTHMB

This article appeared in the weekly newsletter from TheNews.Asia.

Last week, TheNews.Asia reported on an issue that surfaced about investors in BXA token and the condition of Bithumb’s managerial responsibilities and ownership. In case you don’t know, BXA token was to be a global fintech solution that Bithumb was going to list exclusively and use as a native token for global payments on their platform.

The announcement about the token was made just under a year ago, shortly after a plastic surgeon and entrepreneur became the largest stakeholder of Korea’s largest crypto exchange by volume. As soon as the ICO for BXA was announced to a small group of investors, they jumped on it and helped the BXA platform developers raise millions for the ostensible purpose of developing the platform, not for making their payments for Bithumb. 

In the past two weeks, Bithumb announced a new native token launch, Bithumb Coin, and erased BXA token from their records. BXA token investors are, to say the least, furious. Some are pointing the finger at Byung-gun Kim, the largest stakeholder in the exchange at the time, while others say another consultant who is thought to be the brains behind the operation, is mostly to blame.

The problem is that right now it isn’t clear exactly what the BXA token investors are saying these men did in particular. Is it about the mishandling of their investments? Is it about how the acquisition deal fell through with just one more payment left? Or is it that Bithumb now recognizes no such relationship with BXA Consortium at all. This is all about the problem with BTHMB, the company founded by Byung-gun Kim, and the investors who took positions in the BXA token ICO without doing their due diligence.

There is a clear line tracing from BTHMB HOLDINGS PTE LTD to Bithumb Korea and the many announcements that were made both from TheNews.Asia and many other outlets about the BXA Consortium deal. Have shown ample evidence with promises of more to come illustrating in gritty detail just how and when their expectations about BXA token were shattered and who is responsible for it. For example, it is apparent that Mr. Kim founded BTHMB in Singapore in August of 2018, just a short time before he became the largest stakeholder in Bithumb.

He must have known he was about the get his prize. About one year later in August 2019, SG Brain Technology was formed by changing the name of another previous company in Singapore.

At the time that SG Brain Technology was founded, BTHMB already owned Bithumb Korea and Bithumb Global. One interesting note is that Mr. Kim and a Bithumb consultant founded SG brain Technology together and promptly assumed about 95% of BTHMB.

In the meantime between BTHMB entering the scene and SG Brain Technology, the BXA ICO had raised millions from 300 private investors, made a deal to acquire Bithumb, marketed the platform extensively, and took on higher and higher expectations of the success of their project.

Furthermore, the timing of SG Brain Technology entering the scene seems rather convenient for Mr. Kim and Mr. Lee. Although investors were assured that the money for BXA was only being spent on the BXA token development, their SG Brain Technology was quietly assuming all of BTHMB’s holdings, including still Bithumb exchange. A short 3 months later on November 1st, about 2 weeks ago, an alteration to the original acquisition deal by BXA was demanded since they could not make the last payment.

Not a week went by before Bithumb announced Bithumb Chain, then a few days later Bithumb Coin. Sure, BXA token was thought to have been the native token for the Bithumb platform, but they are now completely cut out of the deal. The picture being painted by this string of events should be clear so for the sake of time, the other hand will be shown.

What about the investors? The BXA token ICO was done in private and sold to only a small handful of some 300 individuals or small groups. Some sank many millions of dollars into the project which has become just a few tens of thousands of dollars at this point. BXA token has retained roughly 2% of its ICO value. They invested in a project rolled out by a man who, although a highly successful entrepreneur up to that point, could not have known about how to manage a tech company in the crypto industry.

Bithumb is notorious for unusual behavior dating back to even before Mr. Kim entered the scene. How could one forget the Sunday night in late 2017 when BCH pumped 300-400% in a matter of hours on Bithumb? That is, how could one forget that during the pump, Bithumb’s servers conveniently went down to the public, and when they came back on, BCH had dropped back down to relatively reasonable values? Rumors abound that Bithumb employees had their way with trades while the server was not operational to the public; some of the public stormed Bithumb headquarters in Seoul that night.

Bithumb also gained notoriety to the global public thanks to Blockchain Transparency Institute who pointed out how strange it was that authorities were not investigating Bithumb who claim that in regard to some cryptos, “We have these tokens being wash traded over 90% of their volume [on Bithumb].”

Investors in the BXA ICO invested at their own risk, as we all do. They should have done their own research before taking a position in the ICO, as we all should. It seems, though, that they may not have done research on Bithumb or Mr. Kim for that matter before making their decision to invest. The exchange had a well-earned local reputation of being such an untrustworthy exchange that most Koreans had migrated to Upbit.

Globally, it was no secret that at least for some coins, but likely for many, that they were wash trading enough to remain in the top-10 of exchanges by daily trade volume, where they sit still today. No one deserves to be hoodwinked or scammed, but some scams are so easy to see coming that one wonders how anyone could miss it.

Therefore, this BXA token / BTHMB issue presents an interesting dilemma for the crypto realm to ponder over through the next few weeks and probably few months as the details about the situation come to light that may make it easier for us to understand the mindset of someone who would invest such sums with someone they don’t trust.