CEO Heo Baek-young of Bithumb had an interview regarding a controversy surrounding a cryptocurrency called ‘POPCHAIN’, which was expected to be listed without going through ICO (Initial Coin Offering).
Not only did he talk about Bithumb’s connection with transaction sites, but he also talked about every process on why he decided to list POPCHAIN. “We are truly sorry for all these confusions.” said CEO Heo regarding many suspicious surrounding POPCHAIN. He indicated that Bithumb will establish a thorough verification system and strengthen communications with investors so that this kind of controversy does not happen again. However, he explained that there were misunderstanding during a process of carrying out world’s first reverse ICO.
The Electronic Times met with CEO Heo and talked about controversies surrounding POPCHAIN and what Bithumb is pushing for future blockchain ecosystem and its goals.
◊There are many controversies surrounding POPCHAIN. We want to hear a clear response on many suspicious that are being brought up.
▲Regardless of any reason, it is completely our responsibility for not giving trust to our investors. We are sincerely sorry for this issue. However, it is not true that Bithumb is somehow involved with this issue surrounding POPCHAIN.
Reason why Bithumb was planning to list POPCHAIN was because we wanted to introduce various cryptocurrencies to our customers by pushing for world’s first reverse ICO in South Korea and to expand cryptocurrency market. A structure where cryptocurrencies that are already verified in foreign countries are brought in and traded has been fixed within South Korea.
Reverse ICO is already being mentioned as a new investment alternative in foreign countries, and we really wanted to expand level of participation from our customers in this area. However, there were many insufficient areas during a process of listing POPCHAIN. We are reflecting on the fact that we did not meet our customers’ eye levels and that we did not explain well to them. Fact that we intended on making actions before communications brought disappointment to our customers. To prevent any reoccurrence of our mistake, we are going to prepare many various measures.
◊Please explain on suspicious about having Bithumb’s employees being involved in development and listing of POPCHAIN Coin.
▲It is completely not true. Some community sites and media raised a suspicious of POPCHAIN’s developers being employees from Bithumb. In a name of my title as the CEO of Bithumb, this is completely groundless. Some also pointed out that Bithumb and POPCHAIN have made a deep relationship to gain profit. There is no mutual interest between POPCHAIN and Bithumb. We only participated in listing of POPCHAIN.
◊Did you guys verify the fact that a source code of POPCHAIN is same as that of a different cryptocurrency?
▲We need to understand an ICO process before mentioning a problem regarding a source doe. Main goal of ICO is to attract investments. It is extremely rare that a cryptocurrency has its own source doe during this process. Sometimes, coins carry out ICO process by using source codes from coins based on Ethereum. Many investors were bringing up a suspicion of POPCHAIN using a source code of a different cryptocurrency. They were worried that using a different cryptocurrency’s source code may bring hacking issues, lack of technologies, and errors in source codes. However, significant number of reverse ICOs generally use source codes from previous cryptocurrencies such as Ethereum. Coins are made through a so-called mainnet after funds are received. A discussion involving a source code has to start from mainnet. Fact that POPCHAIN’s source code is similar to that of others cannot be discussed as a problem.
◊Could you verify a suspicion that POPCHAIN Coins are owned by just two people?
▲ICO is generally divided into public markets for normal people and private markets for institutional investors. Many investors actually do not know about this. Although it can be seen as a monopolistic act, it is done to protect customers. This kind of structure is actually more common in private ICO markets.
Let’s say that there is a private ICO done on a coin. Corresponding token is then sold first to designated people. However, some organizations and investors have malicious thoughts and sell it to normal people by putting premium on top of a coin. This incident actually happened occasionally in foreign countries. To prevent such incident, foundations keep coins to themselves and distribute them when coins are listed on exchanges. It is a type of a safety device.
◊This controversy actually happened as bethumb was pushing for world’s first reverse ICO in South Korea. What kind of plans does Bithumb have towards its participation in reverse ICO service in the future?
▲We had a desire to introduce world’s first reverse ICO to South Korean investors.
We acknowledge the fact that we had carried out reverse ICO process without meeting our investors’ eye levels. We have learned many things and we believe that we needed to strengthen our communications with our customers during the process. South Korean cryptocurrency exchanges have been bringing in coins that had gone through ICO processes through foreign exchanges. Although these coins were verified of their safety, South Korean exchanges in turn did not have opportunities with promising reverse ICOs. While we are going through this controversy, we feel that investors’ eye levels have raised significantly.
At this present moment, ICO is a simple structure where few developers introduce white papers and receive investments. As we are going through this issue, we have truly felt how much responsibility we need to carry as one of the biggest exchanges in South Korea.
However, if we decide to avoid reverse ICO market as we become withered by this issue, we believe that we will be instead avoiding many customers. We cannot do everything that others do. By self-reflecting on this issue, we are going to establish more mature frames within our group, evaluation, and advertisement.
◊Do you have a plan of listing POPCHAIN again?
▲We already started an airdrop to keep our promise with our customers. However, we blocked off any money transaction. Even if we decide to go ahead and re-list POPCHAIN once public opinions become better, we feel it is irresponsible to do so. While continuing within reverse ICO, we are planning to apply a strict evaluation system on listing of POPCHAIN.
As of now, we want to say that we will re-consider re-listing of POPCHAIN if it is listed on a top 10 cryptocurrency exchange in the future. There will be tens of thousands of reverse ICOs in the future and we cannot guarantee that we will be able to verify all of them perfectly. However, we feel that it is our duty to introduce new products and services to South Korean investors first. Although investors may have been disappointed in us during this incident, we are going to continue to do our best if they put their trust in us.
◊What plans do you have as far as your social responsibility?
▲Our ultimate goal is to build Bithumb into a financial company. This is the reason why I was hired as the CEO of Bithumb. We are going to actively follow regulations by South Korean Government. In the future, we are going to go through more intense evaluation and verification procedures for ICO and share more information with our investors. We are going to focus on establishing a transparent and fair listing procedure and continue to discover different coins with technical skills.
Staff Reporter Gil, Jaeshik | osolgil@etnews.com