South Korea arrests owner of Bithumb crypto exchange

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South Kore­an pros­e­cu­tors said they have arrest­ed Kang Jong-hyun, the de-fac­to own­er of local cryp­tocur­ren­cy exchange Bithumb, for alleged embez­zle­ment and stock manipulation.

See relat­ed arti­cle: South Korea’s Bithumb exchange with “Kim­chi coin” manip­u­la­tion allegations

Fast facts

  • Pros­e­cu­tors said they have arrest­ed Kang and a per­son iden­ti­fied only as Cho on the charges. Anoth­er per­son, also list­ed only as Cho, has plead­ed guilty to all charges, accord­ing to local news out­let JTBC.
  • A spokesper­son for the pros­e­cu­tors’ office con­tact­ed by Forkast declined to dis­close the full names of the oth­er indi­vid­u­als, a prac­tise com­mon in South Korea due to pri­va­cy laws.
  • Last month, South Kore­an pros­e­cu­tors charged Kang and two oth­er exec­u­tives of Bithumb-affil­i­at­ed firms with breach of trust, embez­zle­ment and fraud­u­lent trans­ac­tions, the Seoul South­ern Dis­trict Pros­e­cu­tors’ Office con­firmed with Forkast via text message.
  • Pros­e­cu­tors sus­pect Kang Jong-hyun to be the own­er of Bithumb and affil­i­ates, and that his broth­er and sis­ter con­spired to mis­ap­pro­pri­ate com­pa­ny funds and manip­u­late stock prices, accord­ing to local out­let New­sis
  • Kang’s younger sis­ter Kang Ji-yeon is the chief exec­u­tive offi­cer of Bithumb-affil­i­at­ed com­pa­nies Inbio­gen and Buck­et Stu­dio. Biotech­nol­o­gy firm Inbio­gen is the largest share­hold­er of video equip­ment man­u­fac­tur­er Vidente, the sin­gle largest share­hold­er of Bithumb. Enter­tain­ment con­tent dis­trib­u­tor Buck­et Stu­dio is the major­i­ty own­er of Inbiogen.
  • Pros­e­cu­tors raid­ed the three Bithumb affil­i­ates last Octo­ber and banned Kang from leav­ing the coun­try. Both his sib­lings were sum­moned and inves­ti­gat­ed by the pros­e­cu­tors last month.
  • “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,” Kang Ji-yeon said in a let­ter to share­hold­ers uploaded on Buck­et Studio’s offi­cial website. 

See relat­ed arti­cle: South Korea reg­u­la­tor rec­om­mends uni­fied cryp­to dis­clo­sure sys­tem to pro­tect investors

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