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South Korean authorities have arrested the de-facto owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.
According to local reports, Kang Jong-hyun was arrested on the 2nd of February, with the net closing in on other executives.
De-Facto Owner Of Bithumb Arrested
South Korean authorities have arrested Kang Jong-hyun, the de-facto owner of Bithumb, South Korea’s largest cryptocurrency exchange. The head of the exchange was arrested after the Seoul Southern District Court issued an arrest warrant on the 25th of January. The warrant included several charges against Kang, including dereliction of duty, fraudulent transactions, and market manipulation.
The 41-year-old Kang is the elder brother of Kang Ji-yeon, who is the head of Bithumb-affiliated companies Inbiogen and Bucket Studios. Inbiogen, a biotechnology firm, is the largest shareholder of Vidente, a video equipment manufacturer, which in turn, is the largest shareholder in the Bithumb exchange, holding a 34.2% stake. Bucket Studio, an entertainment content distributor, is the majority owner of Inbiogen.
A Litany Of Charges
Prosecutors in South Korea have contended that the brothers conspired to embezzle corporate funds and manipulate the stock prices of Inbiogen and Bucket Studio, a video production firm, by issuing convertible bonds. CEO Kang Ji-yeon posted a notice on the Bucket Studio website, apologizing to shareholders and stating that the charges against her brother were unsubstantiated. She further added that she would fully cooperate with the authorities during the investigation. Kang Ji-yeon stated,
“The allegations surrounding my brother Kang Jong-hyun are unconfirmed and one-sided … I can confidently say that there are no problems related to embezzlement or breach of trust within the company.”
Prosecutors had charged Bithumb head Kang and two other executives, charging them with breach of trust, embezzlement, and fraudulent transactions. Prosecutors are convinced that Kang Jong-hyun is the owner of Bithumb and its affiliates and also accused his brother and sister of misappropriating funds and manipulating stock prices.
The Bithumb Saga
It was first reported on the 10th of January that the South Korean National Tax Service agency had launched an investigation into Bithumb, South Korea’s largest cryptocurrency exchange. As part of the probe, authorities had raided Bithumb’s headquarters and had also raided the exchange’s affiliated companies back in October 2022, subsequently banning Kang from leaving the country. The mystery behind the entire episode deepened further when Park Mo, Bithumb’s largest shareholder, was found dead in front of his own home under mysterious circumstances. Mr. Po was also the subject of an investigation into the alleged embezzlement of funds and market manipulation by the authorities. It is speculated that Mo took his own life due to the charges brought against him.
Bithumb is the largest cryptocurrency exchange and has a 24-hour trading volume of around $370 million, according to data from CoinGecko. The exchange was established in 2014 and offers its users 191 coins and over 280 trading pairs.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.