South Korean Prosecutors Put Request to Arrest Bithumb Owners

South Korean Prosecutors Put Request to Arrest Bithumb Owners

Bhushan Akolkar By Bhushan Akolkar Updated 2 min read
South Korean Prosecutors Put Request to Arrest Bithumb Owners
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Bithumb CEO Kang Ji-Yeon and two other executives are facing charges of embezzlement, breach of trust, and conducting fraudulent illegal transactions.

On Wednesday, January 25, a Korean news publication reported that South Korean prosecutors are seeking the arrest of the chairman and owner of crypto exchange Bithumb Kang Jong-Hyun.

Kang along with his younger sister Kang Ji-Yeon, the CEO of two publicly traded Bithumb affiliates, have been accused of embezzlement, breach of trust, and conducting fraudulent illegal transactions by the Seoul Southern District Prosecutor’s Office.

The Financial Investigation 2nd Division of the Seoul Southern District Prosecutor’s Office has also sentenced Kang along with two other Bithumb executives on charges of embezzlement and breach of trust. Besides, under the Capital Markets Act, the executives have also been charged for conducting fraudulent illegal transactions.

Earlier in January, reports emerged that South Korea’s National Tax Service had opened an investigation into Bithum and its affiliate companies. However, this investigation into Kang and other Bithumb executives is separate from the tax evasion investigations. It also centers around the allegations that Kang and others stole Bithumb’s money and conspired to manipulate the stock prices.

Along with Kang and his sister, there have been other executives as well that have been held for wrongdoing linked to other Korean crypto exchanges. Earlier this month, Bithumb chairman Lee Jung-Hoon faced charges of committing a $100 million fraud linked to the crypto exchange. However, the Sould Court found Lee Jung-Hoon not guilty.

Last month in December 2022, Bithumb’s largest shareholder, Park Mo was spotted dead outside his home after being named a suspect for stock manipulation and alleged embezzlement during the ongoing investigation. South Korea’s local media reported that Mo committed suicide.

The Mounting Troubles for Bithumb Exchange

Following the major crackdown by South Korean authorities in 2021, Bithumb was among the five exchanges that sailed through the regulatory crackdown. More than 70 crypto exchanges had to shut down businesses at that time.

Bithum came into regulatory scrutiny further following the collapse of the Terra ecosystem last year in May 2022. Since Terra was also a south Korea-based crypto platform, other market players started facing mounting regulatory challenges. At one point there were also talks that the FTX derivatives platform was looking to acquire Bithumb. However, later in 2022, the FTX exchange itself collapse as reports about the misuse of customers’ funds emerged.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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