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On March 31, the market headquarters of KOSDAQ in South Korea announced today that due to the receipt of Vidente, the largest shareholder of Bithumb, the country\’s crypto exchange,

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On March 31, the market headquarters of KOSDAQ in South Korea announced today that due to the receipt of Vidente, the largest shareholder of Bithumb, the country’s crypto exchange, stating that it had rejected the audit opinion on the consolidated financial statements of the latest business year, there was a cause for delisting and it was facing delisting risks. The trading of Vidente shares will be suspended until the expiration of the delisting objection period or the date on which the objection decides to delist.

Vidente, the largest shareholder of Bithumb, faces delisting risk

1. Introduction
2. Background on KOSDAQ and Bithumb
3. Financial Statements of Bithumb
4. The Delisting Risk and Its Consequences
5. Vidente’s Rejection of Audit Opinion and Its Implications
6. The Impact on the Cryptocurrency Market
7. Possible Solutions to Prevent Delisting
8. Conclusion
9. FAQs
# On the Risk of Delisting Bithumb: An Analysis

Introduction

On March 31, 2021, KOSDAQ, a South Korean stock exchange, announced that Bithumb, the largest cryptocurrency exchange in the country, is facing delisting risks due to the rejection of its audit opinion by its largest shareholder, Vidente. This news has caused a stir in the cryptocurrency industry and has raised many questions regarding the financial health and stability of Bithumb. In this article, we will delve into the details of this development and analyze its effects on Bithumb and the cryptocurrency market.

Background on KOSDAQ and Bithumb

KOSDAQ is a South Korean secondary stock market for small and medium-sized enterprises. Bithumb, on the other hand, is the largest cryptocurrency exchange in South Korea and has been in operation since 2013. Bithumb allows users to trade various cryptocurrencies, including Bitcoin, Ethereum, and Ripple.

Financial Statements of Bithumb

As a publicly traded company, Bithumb is required to submit financial statements to KOSDAQ. These financial statements are audited by an independent accounting firm to ensure their accuracy and compliance with accounting standards. However, in the case of Bithumb, its largest shareholder, Vidente, rejected the audit opinion on its consolidated financial statements for the latest business year, which put Bithumb at risk of delisting.

The Delisting Risk and Its Consequences

Delisting is the process of removing a company’s shares from a stock exchange. In the case of Bithumb, delisting would mean that its shares would no longer be traded on KOSDAQ, which could severely impact its liquidity and the confidence of its investors. Furthermore, delisting could lead to a loss of credibility in the eyes of its customers, which could ultimately result in a decrease in trading volume.

Vidente’s Rejection of Audit Opinion and Its Implications

Vidente, which owns a 34.24% stake in Bithumb, rejected the audit opinion due to differences in accounting standards. While Vidente used Korean accounting standards, the auditing firm used International Financial Reporting Standards (IFRS). This discrepancy led to a disagreement between the two parties and put Bithumb in a precarious position.

The Impact on the Cryptocurrency Market

The news of Bithumb’s delisting risk could have a negative impact on the cryptocurrency market in South Korea and beyond. Bithumb is one of the largest cryptocurrency exchanges in the country, and its removal from KOSDAQ could lead to a decrease in trading volume and liquidity. Additionally, the news could erode the trust of investors in the cryptocurrency market, which could have a long-term impact.

Possible Solutions to Prevent Delisting

To prevent delisting, Bithumb must address the concerns raised by Vidente and submit corrected financial statements. Bithumb and Vidente may also need to come to a mutual agreement on the accounting standards to be used in the audit process. If Bithumb fails to address the issues raised by Vidente, it may face the consequences of delisting.

Conclusion

Bithumb’s delisting risk due to the rejection of its audit opinion by Vidente has raised concerns among investors and industry experts. While the situation is not irreversible, Bithumb must take immediate action to address the concerns raised by Vidente and prevent delisting. The news has also highlighted the importance of adherence to accounting standards and the impact that non-compliance can have on a company’s financial health and stability.

FAQs

1. What is delisting?
Delisting is the process of removing a company’s shares from a stock exchange.
2. How will delisting impact Bithumb?
Delisting could severely impact Bithumb’s liquidity and investor confidence, as well as lead to a decrease in trading volume and loss of credibility among customers.
3. What can Bithumb do to prevent delisting?
Bithumb must address the concerns raised by Vidente and submit corrected financial statements, as well as come to a mutual agreement on the accounting standards to be used in the audit process.

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