Former Bithumb Executive Arrested Under Embezzlement Allegations

The former chairman of South Korean crypto exchange Bithumb, Kang Jong-Hyun, has been arrested on charges of embezzlement and market manipulation, local news outlet JTBC reported on 2 February.

The Seoul Southern District Court had issued an arrest warrant for Jong-Hyun and two other executives last week, accusing them of direlection of duty, market manipulation, and fraudulent transactions. One of the other executives was Jong-Hyun’s younger sister, Kang Ji-Yeon, who is the CEO of two publicly traded Bithumb affiliates, Inbiogen and Bucket Studio.

Prosecutors believe that the two siblings were involved in embezzlement of corporate funds, as well as manipulating the stock prices of Inbiogen — which holds the largest share in Vidente Vidente, the biggest shareholder of Bithumb — and Bucket Studio through the issuance of convertable bonds. Ji-Yeon has denied the allegations via a notice on Bucket Studio’s website, and stated that the siblings will cooperate with the authorities in their investigation.

The arrest of Kang Jong-Hyun, however, is unrelated to a separate probe launched by the South Korean National Tax Service last month, which is looking into a possible tax evasion at Bithumb and its affiliates. The Seoul offices of the crypto exchange were also raided last week as part of an investigation into price manipulation of a certain coin, though the asset was not named.

At the end of last year the largest shareholder of Bithumb, Park Mo, was found dead in front of his own home. It is suspected that the businessman took his own life as he was the target of an investigation for his alleged involvement in the embezzling of funds at Bithumb-related companies, as well as market manipulation.