Investors Rail Against Bithumb over BXA Token

Reports of a legal battle have emerged following the failure of Singapore-based BTHMB (BXA Consortium) to make their final payment to acquire Korea-based cryptocurrency exchange Bithumb. The resulting shift in payment responsibilities has led BXA Token to collapse in value and investors to be furious from the loss of their investment and that the largest stakeholder in the exchange is thought to be profiting from the mess.

According to a recently-surfaced report, BTHMB HOLDINGS PTE LTD (Singapore) signed a 51% stake agreement in October 2019 for the acquisition of Bithumb management rights. Part of the deal included a stipulation that BXA Token would be listed on Bithumb and used to settle certain contracts on the Bithumb platform.

In preliminary sales, BXA tokens were sold for 150-300 KRW each. The total volume sold through ICO reached about 30 billion KRW ($25,723,932). There have been about 300 participants in the sale.

Since September 30th, however, BXA tokens have lost nearly all of their value despite the acquisition being nearly completed with only one payment remaining and a good market outlook. BTHMB HOLDINGS PTE LTD has ultimately defaulted on their final payment; BXA tokens now trade at about 3 KRW ($.0026) each. One investor claims that he invested over a million dollars in the tokens, which is now worth just over a ten thousand dollars.

BXA Token Fraud?

In light of the deal-gone-wrong, investors first complain that they were assured that BXA would be the Bithumb Coin that was recently launched.

Last December, Byung-gun Kim, then acting chairman of BTHMB explained that “BXA token sales goes to the BXA mainnet development and alliance, and do not go to Bithumb acquisition fund.” Therefore, at the outset it is plausible that BTHMB HOLDINGS PTE LTD simply and genuinely ran out of funds to finalize the acquisition of the exchange, but investors find the claim dubious.

As one of the largest crypto exchanges in Korea, a market which is very active in investing in cryptocurrencies, Bithumb promoted BXA as an ambitious cryptocurrency platform which would serve global fintech outlets worldwide.

To-date, Bithumb is listed as a member of the alliance companies associated with BXA on the BXA website despite the deal falling through. On the other side, announcements about BXA token have been removed from Bithumb’s website, replaced by newer announcements about Bithumb Coin.

Who Issued BXA Tokens?

Some BXA token investors insist that Mr. Junghoon Lee shares an equal share of responsibility for the ordeal as Byung-gun Kim. Both men own nearly exactly equal shares of SG Brain Technology Consulting PTE which owns BTHMB HOLDINGS PTE LTD. Furthermore, investors claim that Mr. Lee acted as the real director of the exchange in the background, and that several Bithumb employees work or worked at SG Brain Technology Consulting, but this has not been corroborated.

Others involved in the issue assert that Mr. Kim is solely responsible since he was listed as the president of the exchange at the time the problems began to arise.

What is apparent is that BTHMB counted their eggs before they hatched. The deal was not completed before Bithumb was marketed as an official partner of BXA which would surely list BXA token. The weight of their claims comes at a price when swung the wrong way.

Since the failed take-over was made public, all mention of BXA has been removed from Bithumb’s website and tried to divert attention by launching the Bithumb Chain and Bithumb Coin. When asked about the relationship with BXA, an official response from Bithumb Global stated rather matter-of-factly that there is no relationship with BXA and the BXA is not related to Bithumb because the issuer was BTHMB.

As the case drags on through what is likely to be several months or years, the details over who or what entity holds the majority of responsibility for the suspicious token issuance will be more fleshed out and suffer the heat of light.

The story bears shades of the BOSCoin fiasco that unfolded earlier this year in Korea where investors rallied against a major shift in the business structure and even technical platform of the project. The same questions and cries about “What is really going on?“ and “Where did the money go?” follow pointed fingers and investors left high and dry then and now.

Surely this is not the last this story will be in headlines.