No, we are not talking about SBF
Bithumb, one of South Korea’s largest cryptocurrency exchanges, has been no stranger to legal trouble in recent years. The company has weathered a crackdown in 2021 and faced a steady stream of issues, both related to tax evasion and alleged market manipulation. However, the recent arrest of Bithumb’s former chairman, Kang Jong-Hyun, has taken the legal drama to a whole new level.
According to local news outlet JTBC, Kang is being accused of conspiring with a business partner to manipulate stock prices and embezzle 60 billion won (approximately $49 million) from Bithumb. Prosecutors believe that Kang owned Bithumb affiliates and used good news to boost the stock prices of these companies. Kang’s younger sister, Kang Ji-Yeon, who is the CEO of Inbiogen and Bucket Studio, both associated with Bithumb, is also facing charges.
The arrest of the former Bithumb chairman has raised many questions, not least of all how a cryptocurrency exchange, which is meant to operate with transparency and security, could become embroiled in such scandal. Bithumb has long been one of the largest and most reputable crypto exchanges in South Korea, and the recent arrest of its former chairman has cast a shadow over the entire industry.
Kang Jong-Hyun has denied the allegations against him, stating that he no longer has a stake in any of the related companies. The recent arrest is unrelated to a separate investigation into possible tax evasion at Bithumb, which was reported by financial news agency Yonhap last month.
In a stark contrast to the recent arrest, another former chairman of Bithumb, Lee Jung-Hoon, was found not guilty of fraud charges in January 2023. Lee was in the dock for violating the Act on the Aggravated Punishment of Specific Economic Crimes in October 2018, when he was negotiating with Kim Byung-gun, founder of cosmetic surgery company BK Group, for the latter’s acquisition of Bithumb. However, the acquisition fell through and the token sale never took place.
The recent acquittal of Lee Jung-Hoon has been overshadowed by the suicide of Park Mo, Vice President of Bithumb’s largest shareholder, Vidente. Park was being investigated for embezzlement and stock price manipulation at the time of his death, and local sources allege that the charges were shifted onto him by his employers, the Kang siblings. Kang Jong-Hyun has been referred to as Bithumb’s “hidden chairman” while his sister, Kang Ji-Yeon, allegedly heads footwear company Inbiogen.
The arrest of Kang Jong-Hyun has highlighted the need for stricter regulation in the cryptocurrency industry. The industry has come under scrutiny in recent years, with many investors and regulators questioning its transparency and security. The arrest of Bithumb’s former chairman is a timely reminder that, despite its potential for growth and innovation, the crypto industry is not immune to corruption and fraud.
In conclusion, the arrest of Kang Jong-Hyun is a major blow to Bithumb and the entire cryptocurrency industry. The charges of embezzlement and market manipulation have cast a shadow over one of South Korea’s largest and most reputable crypto exchanges, and raised questions about the transparency and security of the industry as a whole. It is important that stricter regulations are put in place to ensure that the crypto industry operates with integrity and that investors’ interests are protected.
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