South Korea’s Largest Exchange Bithumb to Create a Native Token

Bithumb, one of South Korea’s biggest cryptocurrency exchange reportedly plans to develop a native cryptocurrency dubbed Bithumb Coin before the end of 2018.

According to reports, the project aims to attract investors to the company. But Bithumb did not reveal the number of the tokens that it will allocate for private sales, reserved for big investors.

Bithumb is a subsidiary of BTCKorea, a company required by law to publicly release every company’s (including its subsidiary’s) information and earnings. To this end, Bithumb’s ICO is complicated and cannot be clearly shown in the company’s annual report; this is the reason behind the lack of detailed information about the upcoming ICO. When these complications are cleared, the company will release necessary details.

Bithumb may establish its ICO in Singapore, following the steps of Icon (ICX), a Korean platform token, which launched its coin in Switzerland to prevent any lash back from the law. Cryptocurrency companies are not allowed to issue tokens in their country. This is accrued to the ban on fundraising strategy of ICOs in South Korea in 2017.

Many exchanges are issuing their tokens to boost their revenue. These tokens are unique assets used as alternative currency aside the regular USD, BTC, ETH. These unique tokens also provide lower transaction fees for traders.

Bithumb is set to join the increasing number of exchange operators that are generating revenue by launching an ICO. About four months ago, Houbi, a Chinese cryptocurrency exchange created and issued an ERC20 token dubbed Houbi Token (HT), with a limited supply of 500 million. However, this token has no ICO, and it is only available to registered Houbi traders.

Another example of exchanges with native tokens is Binance, the world’s largest cryptocurrency exchange (by volume), also developed its own cryptocurrency called the Binance Coin (BNB), an ERC20 token. The company conducts a “coin burn” quarterly. This operation pushes down the total supply of the tokens, and then increases its value.

As stated by Binance in its whitepaper, the company would spend 20% of their quarterly income to purchase the token from investors and “burn” them. This will continue until 50% of the total BNB (100 Million tokens) are recovered.

KuCoin, another cryptocurrency exchange, has a native KuCoin Shares (KCS); the token not only reduces transaction fees, but it also pays investors a part of the company’s profit.