Bithumb owner arrested over alleged $50 million embezzlement charges

According to local media reports, the owner of South Korea’s largest cryptocurrency exchange, Bithumb, was arrested in the country Thursday on charges of embezzlement and stock manipulation.

Prosecutors said that Kang Jung Hyun, the actual owner of local cryptocurrency exchange Bithumb, has been arrested.

A warrant for Kang’s arrest was issued by the Seoul South District Court on January 25 over several allegations, including dereliction of duty, market manipulation, and fraudulent transactions.

Kang Jong-hyun enters the Seoul Southern District Court on Feb. 1, 2023, to attend a hearing to determine his arrest. Image: Yonhap News Agency.

Brother and sister involved in misuse of funds?

According to the prosecution, he manipulated stock prices and stole approximately $50 million. Yonhap news agency reported that Kang’s brother and sister conspired to embezzle corporate funds and manipulate stock prices.

The company’s headquarters were raided by the Crime Intelligence Investigation Unit of the Seoul Metropolitan Police Agency over the questionable $25 million sale made on the stock exchange and the failed BTHMB deal.

In the aftermath of the raid, the authorities issued a suspension of departure order against Kang to prevent him from leaving the country.

Authorities also arrested and detained Ju Mo, a member of Kang’s inner circle and a spokesman for Pethomb.

Image: CCN

The Bithumb owner’s romance with the actress

Kang has recently come to prominence after his relationship with Korean actress Park Min Young.

Park admitted that Kang, who was engaged to her, is her boyfriend, but stated that their romance is now over.

Park released an official statement through her agency confirming her relationship with Kang. She denied receiving any money from the wealthy businessman.

Kang Ho is the brother of Kang Ji-yeon, the CEO of Inbiogen, a subsidiary of Bithumb. The company is majority owned by Vidente, Bithumb’s largest shareholder with 34.2%.

Kang refuted the allegations of stock manipulation and embezzlement, stressing that he had no ties to the company as he no longer owned any shares.

For his part, Ji Yoon stated that the allegations against his brother are “unconfirmed.”

SBF was interested in the South Korean cryptocurrency exchange

It was reported earlier this month that South Korea’s National Tax Service had launched an investigation into alleged tax evasion by Bithumb and its partners.

Bithumb is one of five remaining Korean cryptocurrency exchanges after clamping down on the sector in 2021, with nearly 70 local cryptocurrency exchanges shutting down for non-compliance with regulatory standards.

Sam Bankman-Fried, the founder and former CEO of FTX, reportedly planned to propose a purchase of the cryptocurrency exchange sometime when he was acquiring crypto companies around the world. No agreement was disclosed.

Law enforcement has been investigating Bithumb for most of 2022, with the latest development being the acquittal of its former boss on fraud charges.

South Korea has always been one of the most active places for cryptocurrency investment and trading.

Authorities have been wary of regulating the digital asset class due to the perception that regulating cryptocurrencies would legitimize the industry.

Featured image by Freepik