South Korean Prosecutors Raided UpBit and Bithumb HQs (Report)

South Korean prosecutors have reportedly raided the offices of the two leading cryptocurrency exchanges in the country – Upbit and Bithumb – as part of an ongoing investigation against Kim Nam-kuk. 

The politician faced public scrutiny after several reports indicated he acquired 800,000 Wemix tokens by bypassing necessary regulations. He transferred the coins from Bithumb to Upbit last year, and the authorities suggested the platforms could have been involved somehow. 

The Inspection Spreads Further

According to a local media outlet, the Korean authorities searched the headquarters of Upbit and Bithumb in Seoul in a bid to unravel the case of Kim Nam-kuk. 

The Democratic Party (DP) recently urged him to sell his 800,000 Wemix coins following accusations that he could have used insider information to accumulate them a few years ago. 

The politician allegedly withdrew the assets at the beginning of 2022: several months before the enforcement of legislation that requires crypto entities to report personal information when transferring over $758. He was also part of the team that proposed a delay of income taxation on digital assets in South Korea. 

Nam-kuk said he would fulfill the DP’s requirement and sell the holdings, currently worth approximately $660,000.

“I received the recommendation from the party to sell my crypto assets. I will faithfully implement the recommendation. I will transparently disclose data to the investigation team and undergo the inquiry faithfully.”

Wu Blockchain argued that Nam-kuk sent 800,000 Wemix coins from Bithumb to Upbit in 2022, which could have sparked the investigation against the exchanges. Upbit believed this was “an improper transaction” and reported it to the government at the time. 

The Second Investigation on Bithumb This Year

Korean prosecutors raided the offices of Bithumb in January following rumors that the company or a person working for it manipulated the price of an undisclosed coin listed on its platform.

“This is a search and seizure to secure the transaction details of a specific coin, and it has nothing to do with Bithumb,” the authorities stated.

The inspection came shortly after the prosecutors requested an arrest warrant for Kang Jong-Hyun (the exchange’s owner) over embezzlement charges and market manipulation. His sister also faced issues with domestic law after the Seoul Southern District Prosecutor’s Office claimed she artificially inflated the share price of certain firms by issuing convertible bonds. 

Despite being one of the biggest cryptocurrency exchanges in South Korea, Bithumb has been surrounded by certain levels of controversy for years. Park Mo – the largest shareholder of Bithumb Holdings Co. (the company behind the platform), was found dead in December 2022 in front of his house in southern Seoul. 

While the initial investigation found no signs of violence and estimated that the death may have been suicide, the crypto community cast doubts on it. For one, Mo was close to Jong-Hyun and his sister and supposedly discussed the potential purchase of his organization to the now-bankrupt FTX.