Korean prosecutors issue warrant for Bithumb owner

Korean prosecutors have issued an arrest warrant for Kang Jong-Hyeon, the alleged Bithumb crypto and derivatives exchange owner. According to reports, the executive is wanted for embezzlement of funds and stock price manipulation.

Bithumb owner wanted by law enforcement

Korean prosecutors from the Seoul Southern District office have issued a warrant of arrest for a 41-year-old man named Kang Jong-Hyeon, believed to be the owner of a cryptocurrency exchange named Bithumb.

Kang is wanted alongside two other senior members of the exchange for embezzlement of customer deposits and alleged stock price manipulation. Reports on the internet dictate that Kang and his executive colleagues breached the Korean Capital Markets Act on aggravated punishment of specific economic crimes.

The owner allegedly manipulated the stock prices of Bithumb’s affiliated companies, Imbiogen and Bucket Studio, by issuing convertible bonds. Kang Ji-Yeon is the CEO of these two Bithumb-affiliated companies and has recently been caught up in a media frenzy for having an affair with an actress.

Kang is believed to have conducted the manipulation in October last year. Reports indicate that prosecutors have strong evidence against Bithumb executives that was seized when investigators raided various companies entangled in the allegations, including Vident, Imbiogen, and Bucket Studio.

Vident currently stands as the largest shareholder of Bithumb holdings, with a 34.2% stake. The largest stakeholder of Vident is Imbiogen, primarily owned by Bucket studio. 

Bitzlato founder also charged with fraud

On Jan. 19, a Russian native and founder of Hong Kong-based crypto exchange Bitzlato, Anatoly Legkodymov, was also arrested on similar fraud cases and money laundering.

The U.S. Department of Justice reported the arrest of the alleged criminal, claiming that the executives knew the exchange was linked to Hydra, an online illicit narcotic marketplace. The executive was arraigned in court, and his trials are expected to proceed moving forward.

His arrest prompted prosecutors and law enforcement to issue a warning on illicit crypto criminals and heads of entities in the industry conducting illegal activities. According to a comment by U.S. Attorney General Monaco, the arrest also showed that regulators worldwide were collaborating.