The majority owner of the South Korea crypto exchange giant Bithumb, Lee Jung-hoon, has been indicted on a USD 88m fraud wrap over a failed altcoin token listing controversy – and could also face a civil case from investors in Hong Kong.
Per Yonhap, domestic prosecutors have decided to press ahead with a case that began as a civil complaint to police from a group of investors. Back in 2018, the BK Group attempted a takeover of Bithumb, and was set to list the group’s BXA token on its platform. That listing never took place, despite Bithumb’s original assertions, leading to a massive fall in the token’s value.
The BK Group’s chairman Kim Byung-gun has been involved in a bitter struggle with Lee ever since. The former is believed to have used money raised from a pre-sale of BXA tokens to help fund the takeover bid, which ultimately collapsed with BK forfeited payments. Bithumb has been looking for a buyer since last year, with Lee keen to exit the crypto exchange scene. Lee was brought in for questioning by police in September last year following raids on the Bithumb headquarters.
The police also looked into Kim’s role in the matter after a group of investors also filed accusations against him. But, the news agency noted, prosecutors decided not to press charges against the BK chief, instead ruling that he too was likely “a victim of deceit” in the case.
A branch of the Seoul District Court confirmed the charges, which will now go to trial at an as-yet-unannounced date. But the court ruled that even though the size of the alleged fraud was high, prosecutors had not asked for Lee to be remanded in custody, as the Bithumb owner had “faithfully attended the investigation hearing” and had paid capital gains tax in a timely manner.
Meanwhile, in Hong Kong, two Bithumb subsidiaries could be hit with a civil action for “breach of contract,” reported the Korea Times, with “top executives facing criminal charges of fraud.”
The media outlet quoted a former Bithumb partner in Thailand as stating that a Hong Kong law firm named Prince’s Chambers was preparing to file lawsuits within the month following Bithumb’s decision last year to “unilaterally halt” its Thai operations.
The ex-partner claimed that Bithumb had had “no true intention to establish an exchange in Thailand” and “made empty promises from the start,” as part of an effort “to sell BXA coins by exaggerating the firm’s overseas presence.”
– Sales and Income Rocket at South Korea’s Biggest Crypto Exchanges
– Bithumb Must Compensate BTC Address Book Mixup Customers – at 2018 Prices
– South Korean Crypto Exchange Execs Arrested Amid USD 2B Fraud Fears
– South African ‘Exit Scam’ Sees Brothers Vanish with USD 3.6B in Bitcoin