Bithumb Owner Arrested Over Alleged $50 Million Embezzlement Charges

According to local media reports, the owner of South Korea’s largest cryptocurrency exchange, Bithumb, was arrested in the country on Thursday on accusations of alleged embezzlement and stock manipulation.

Kang Jong-hyun, the de facto proprietor of the local crypto exchange Bithumb, has been apprehended, prosecutors said.

Kang was given an arrest warrant by the Seoul Southern District Court on January 25 for several allegations, including dereliction of duty, market manipulation, and fraudulent transactions.

Kang Jong-hyun enters the Seoul Southern District Court on Feb. 1, 2023, to attend a hearing to determine his arrest. Image: Yonhap News Agency.

Brother And Sister Involved In Funds Misuse?

According to the prosecution, he manipulated stock prices and stole approximately $50 million. Yonhap News Agency reported that Kang’s brother and sister plotted to misappropriate corporate funds and manipulate stock prices.

The company’s headquarters were raided by the Intelligence Crime Investigation Unit of the Seoul Metropolitan Police Agency due to the questionable $25 million token sale offered on the exchange and the bungled BTHMB deal.

Following the raid, authorities issued a hold departure order against Kang to prevent him from leaving the country.

The authorities also seized and detained Jo Mo, a member of Kang’s inner circle and a Bithumb spokesperson.

Image: CCN

Bithumb Owner’s Romance With Actress

Kang recently rose to prominence following a relationship with Korean actress Park Min-young.

Park acknowledged that Kang, who had been linked to her, was her boyfriend, but she stated that their romance is now over.

Park issued a formal statement through her agency confirming her relationship with Kang. She denied receiving any money from the wealthy businessman.

Kang is the brother of Kang Ji-yeon, the top executive of Inbiogen, a Bithumb subsidiary. The enterprise owns the majority of Vidente, the largest Bithumb shareholder with a 34.2% holding.

Kang refuted the claims of stock manipulation and embezzlement, asserting that he has no ties to the company because he no longer owns any shares.

Ji-yeon, for his part, stated that the allegations against his brother were “unconfirmed.”

SBF Had Interest In The South Korean Crypto Exchange

It was reported earlier this month that South Korea’s National Tax Service had initiated an inquiry into alleged tax evasion by Bithumb and its partners.

Bithumb is one of five remaining Korean cryptocurrency exchanges following a clampdown on the sector in 2021, during which roughly 70 local digital currency exchanges were shut down for not adhering with regulatory standards.

Sam Bankman-Fried, the founder and former CEO of FTX, reportedly planned to propose a buyout of the cryptocurrency exchange at one point when he was acquiring crypto companies around the world. No agreement was ever disclosed.

BTC total market cap at $459 billion on the daily chart | Chart: TradingView.com

Law enforcement has been investigating Bithumb for the most of 2022, with the most recent development being the exoneration of its previous chairman on charges of fraud.

South Korea has always been one of the most active investment and trading venues for cryptocurrencies.

Authorities have been cautious to regulate the digital asset class because of the perception that regulating cryptocurrencies would legitimize the industry.

Featured image from Freepik