Kiwoom Eyes Bithumb Stake as Brokerages Race Into Crypto

Kiwoom Securities is seeking to buy a stake in crypto exchange Bithumb, a report from Korean media said. The move aligns with the Financial Services Commission's plan to implement new rules in July that could allow securities firms to offer crypto services.

Kiwoom, one of South Korea's largest brokerages, would gain exposure to Bithumb's trading volume and customer base. Bithumb is the country's second-largest exchange by volume, behind Upbit.

The deal is not final and faces regulatory approval. The FSC has not yet spelled out the exact scope of services brokerages can offer. Any acquisition would need to comply with the new framework.

Other brokerages are also competing for stakes in crypto exchanges, the report said. Competition could push up valuations.

South Korea has tightened crypto regulation in recent years. Exchanges must use real-name accounts and meet anti-money laundering standards. The July reforms are meant to integrate crypto into the regulated financial system.

AlphaScala's earlier analysis of the Korean crypto law examined how the changes could reshape broker participation.

Bithumb has a complicated past. It suffered a $30 million hack in 2018 and has seen multiple ownership changes. It has faced regulatory scrutiny over compliance. A partnership with Kiwoom could strengthen its competitive position against Upbit, which dominates over 70% of the market.

The FSC plans to finalize the rules in the coming weeks. The July implementation date gives brokerages a narrow window to secure positions. Approval is uncertain. The FSC has said it aims to increase transparency in the crypto sector while protecting investors.