Huobi reportedly wants to buy Bithumb, South Korea's largest cryptocurrency exchange.
This has been revealed by The Bell Korea, which states that the Chinese company is mentioned as a possible buyer of the exchange.
The decision would be part of the company's strategy to expand into Korea, where it is currently struggling to make a breakthrough with its exchange, mainly due to slow KYC procedures, which would be sped up by going directly through Bithumb.
Huobi is a Chinese cryptocurrency exchange active since 2013, also operating in South Korea, Singapore and Hong Kong, Japan and the US.
The sale would involve 100% of the shares of Bithumb Holdings, a company that in turn owns 70% of the exchange and has been looking for a buyer for some time.
Why does Huobi want to acquire Bithumb?
The Bithumb exchange currently has an operating margin of around 60% and is a leader in one of the major cryptocurrency markets in South Korea and the world.
To operate in the country, exchanges must comply with regulations that require verification of users' real names and, to date, only four exchanges would fully comply with this requirement: Bithumb, Upbit, Coinone and Kobit.
This makes it impossible for Huobi to compete on a level playing field in this market, and the identified solution would be to buy Bithumb, especially since it seems that they want to solve the problem quickly.
The purchase is expected to be made together with another investor, a company that produces television screens and is expanding its business with the incorporation of technologies such as virtual reality and blockchain.
As Huobi is the leader in the Chinese cryptocurrency trading market, the purchase of Bithumb would create a true Asian giant capable of competing globally with the major exchanges existing today.
Asian markets are among the most active in the cryptocurrency sector, and a giant like Huobi / Bithumb could play a central role in the development of this market.
The potential acquisition cost is unknown.