Bithumb ex-chair arrested in South Korea

Bithumb ex-chair arrested in South Korea

Bithumb exchange’s former chairman, Kang Jong-hyun has been arrested by Korean authorities for suspected embezzlement charges. 

On Jan. 25, the Seoul Southern District Court issued an arrest warrant for the 41-year-old Bithumb owner on multiple charges concerning fraudulent transactions, breach of trust, market manipulation, and dereliction of duty. 

According to the prosecutors, Kang Jong-hyun and his brother Kang Ji-yeon collaborated to inappropriate and manipulate stock prices. 

Kang Ji-yeon is currently the CEO of Bithumb affiliate Inbiogen and Bucket Studio. Vidente, a proxy arm of the Inbiogen business, owns the largest share of the Bithumb (34.2% stake), while the Bucket studio owns the largest share in Inbiogen. 

While reacting to the latest arrest of his elder brother, Kang Ji-yeon, in a letter to shareholders, described the allegations surrounding his brother’s arrest as unconfirmed and one-sided because the Bithumb has not breached any of the rules of engagement. 

Controversies surrounding Bithumb upheavals 

The 2021 Korean authorities’ crackdown on exchanges with insufficient regulatory requirements has led to the packing up of over 65 local crypto exchanges. Bithumb is one of the five exchanges operating to date.

On Jan. 10, the Korean National Tax Service (NTS) initiated a special tax investigation exercise. Tax agents allegedly raided the headquarters of Bithumb in the country’s capital city, Seoul, as a part effort to ascertain its compliance with tax obligations.

The mysterious death of Park Mo, a major shareholder in Bthumb, has further complicated the woes of the Bithumb exchange. Before his death in December, Park Mo also faced allegations of gross embezzlement of funds. However, reports state that he killed himself. 

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