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Former Bithumb chair faces 8-year imprisonment

November 18, 2023 Coin Telegraph

Bithumb

According to prosecutors, Lee Jeong-hoon intended to revamp Bithumb’s governance to gain from exchange coins, circumventing financial regulations.

Lee Jeong-hoon, the former chair of Bithumb, one of South Korea’s major cryptocurrency exchanges, is at the center of a legal battle and might be facing an eight-year prison sentence in the appeal whose verdict is scheduled for Jan. 18.

According to Korean local media reports, prosecutors contend that Lee intended to revamp Bithumb’s governance to gain from exchange coins, circumventing financial regulations. They claim Lee knew about challenges in the BXA Coin listing but didn’t disclose it to Kim. Despite listing issues, Lee purportedly received payments without informing Kim about the decision not to list BXA Coin.

The South Korean prosecutors requested an eight-year prison sentence for Lee Jung-hoon.

Lee’s defense challenges these assertions, pointing out discrepancies in Kim’s statements and questioning his reliability. Lee insists on Kim’s competence to lead Bithumb, maintaining that Kim was informed about the progress of BXA Coin’s listing.

Lee Jeong-hoon faces legal issues related to accusations of violating the Act on Aggravated Punishment for Specified Economic Crimes, particularly fraud. The prosecution alleges his involvement in a 110 billion won fraud scheme with BK Group Chairman Kim Byung-geon. The charges originate from a deal in which Lee purportedly presented Kim with the chance to acquire and jointly manage Bithumb, along with commitments to list BXA on the platform.

The decision on Lee’s appeal might set a precedent for legal proceedings involving cryptocurrency exchanges and governance. This development coincides with Bithumb’s preparations for an IPO on KOSDAQ by 2025.

The appeal’s result will significantly impact Bithumb’s future and the fate of BXA Coin. A guilty verdict might trigger a reassessment of governance frameworks in cryptocurrency exchanges, potentially resulting in increased regulatory scrutiny.

While the cryptocurrency community and investors anticipate the appeal outcome, the case underscores the industry’s dynamic nature and the necessity for well-defined regulatory frameworks to tackle governance issues and uphold trust among investors and stakeholders.

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Crypto Exchange Bithumb Gearing Up To Go Public on Korean Stock Market: Report

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Bithumb plans to be first crypto exchange listed on Korea stock market: Report

November 13, 2023 Coin Telegraph

Bithumb

South Korean crypto exchange Bithumb hasn’t confirmed the planned IPO but told local media it recently selected an underwriter.

Crypto exchange Bithumb plans to become the first digital asset company to go public on the South Korean stock market.

Local news outlet Edaily reported on Nov. 12 that Bithumb is getting ready for an initial public offering (IPO) on the KOSDAQ — South Korea’s version of the United States Nasdaq — with an expected listing date set for sometime in the second half of 2025.

Bithumb declined to confirm whether the IPO was going ahead but admitted they had recently selected an underwriter, a company tasked with guaranteeing the financial security of another typically before a firm goes public. Bithumb chose Samsung Securities as its potential IPO underwriter, according to Edaily.

Bithumb’s former chairman Lee Jeong-hoon returned to Bithumb as its registered director, according to sources familiar with the matter. Meanwhile, CEO Lee Sang-jun was excluded from a place on the board of directors due to an ongoing investigation into alleged bribery.

Additionally, the sources claimed Bithumb’s move to go public resulted from not wanting to give up further market share to Upbit — the largest crypto exchange in South Korea.

Bithumb is currently the second largest crypto exchange in South Korea by daily trading volume, a distant second to Upbit. In July, Upbit’s monthly trading volumes surpassed that of Coinbase and Binance for the first time.

Both Upbit and Bithumb became the subjects of unwanted attention in May when South Korean authorities raided their offices over allegedly fraudulent crypto trading on behalf of a local lawmaker.

In February, Kang Jong-hyun, one of Bithumb’s largest shareholders — and suspected “real owner” — was arrested on embezzlement charges following a lengthy police investigation into his allegedly illicit behavior.

41-year-old Jong-hyun is the elder brother of Kang Ji-yeon, the head of Bithumb affiliate Inbiogen. The firm holds the largest share in Vidente Vidente, the biggest Bithumb shareholder with a 34.2% stake.

Bithumb was founded in 2014 and at the time of publication had a 24-hour trading volume of roughly $580 million, according to CoinGecko data.

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South Korean city to seize crypto from thousands of tax evaders: Report

August 22, 2023 Coin Telegraph

Bithumb

City authorities of Cheongju are looking to seize cryptocurrency from anyone who owes at least $750 in crypto taxes to the government.

The South Korean city of Cheongju, the capital of North Chungcheong province, has said it intends to begin confiscating cryptocurrency from local tax delinquents.

The administration of Cheongju has requested seven South Korean crypto exchanges to inquire into holdings of thousands of tax evaders, the local news agency Yonhap reported on Aug. 22.

City authorities reportedly ordered trading platforms like Upbit and Bithumb to inquire into crypto assets of 8,520 users who owe at least 1 million won ($750) in local taxes. Following the inquiry, Cheongju authorities plan to confiscate cryptocurrency from tax delinquents, the report notes.

According to the city administration, cryptocurrencies have been increasingly used as a means of concealing property in South Korea. This latest initiative approach aims to ensure that South Korean residents who have evaded their tax responsibilities are held accountable.

Upbit and Bithumb did not immediately respond to Cointelegraph’s request for comment.

In 2022, Cheongju administration reportedly managed to collect overdue taxes from 17 individuals after receiving details of their cryptocurrency holdings from around 16,000 crypto investors. The city collected a total of 68 million won ($51,000).

Tax-related cryptocurrency confiscations have increased in South Korea in recent years. In 2022 and 2021 combined, the South Korean government confiscated as much as 260 billion Korean won ($180 million) worth of cryptocurrencies from tax evaders. In 2021, the city administration of South Korea’s capital Seoul seized crypto worth 25 billion won ($22 million) from individuals and company heads.

The seizures came soon after the South Korean government in 2021 enacted laws allowing regulators to seize cryptocurrencies like Bitcoin (BTC) from tax delinquents.

South Korea isn’t the only country that seizes cryptocurrency from tax evaders. Last year, Argentina’s tax authority seized more than 1,000 cryptocurrency wallets linked to delinquent taxpayers in the country. The United States Internal Revenue Agency also practices cryptocurrency confiscations crypto from tax evaders, according to IRS deputy associate chief counsel Robert Wearing.

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Bithumb owner arrested in South Korea over alleged embezzlement

February 2, 2023 Coin Telegraph

Arrest

The net is closing in on Bithumb executives as the suspected real owner of the exchange is arrested.

The suspected real owner of South Korea’s largest crypto exchange Bithumb has been arrested on alleged embezzlement charges on Feb. 2 local time.

According to local media reports, Kang Jong-hyun was arrested on charges of alleged embezzlement. The Seoul Southern District Court issued an arrest warrant for the businessman on Jan. 25 with multiple charges, including dereliction of duty, market manipulation, and fraudulent transactions.

The 41-year-old is the elder brother of Kang Ji-yeon, the head of Bithumb affiliate Inbiogen. The firm holds the largest share in Vidente Vidente, which is the biggest shareholder of Bithumb with a 34.2% stake.

According to prosecutors, the brothers colluded to embezzle corporate funds and manipulate stock prices of Inbiogen and video production firm Bucket Studio through the issuance of convertible bonds.

In a notice on the Bucket Studio website, CEO Kang Ji-yeon apologized to shareholders and said the claims against his brother were “unconfirmed,” adding that he will cooperate with the authorities in the investigation.

*One of the few public photos of Kang Jong-Hyun. Source: Korea Post English*

On Jan. 10, Cointelegraph reported that the South Korean National Tax Service agency launched an investigation into South Korea’s largest crypto exchange. Investigators reportedly raided Bithumb’s Seoul headquarters as a part of the ongoing tax probe.

The saga goes even deeper as Bithumb’s largest shareholder, Park Mo, was found dead in front of his own home in late December.

He was also subject to an investigation amid allegations of embezzlement and market manipulation. It was suspected that Park Mo took his own life due to the charges brought against him.

Bithumb has a 24 hours trading volume of $370 million, according to CoinGecko. The exchange, established in 2014, offers 191 coins and 287 trading pairs, BTC/KRW is the most popular.

Bithumb

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