Key Takeaways
- Kang is facing charges of embezzlement, breach of trust, and fraudulent, illegal transactions.
- His sister Kang Ji-Yeon, the CEO of Bithumb affiliates, Inbiogen and Bucket Studio, is also facing similar charges.
On January 25, South Korean prosecutors requested an arrest warrant for Kang Jong-Hyun, chairman and owner of cryptocurrency exchange Bithumb.
As per local media reports, Kang is facing charges of embezzlement, breach of trust, and fraudulent, illegal transactions. Apart from Kang, his two other executives, including his sister Kang Ji-Yeon, the CEO of Bithumb affiliates, Inbiogen and Bucket Studio, were also charged with similar allegations.
“Prosecutors seized the circumstances in which Mr. Kang stole company money or manipulated stock prices, and in October of last year, they seized and searched Bithumb affiliates, such as Vident, Inbiogen, and Bucket Studio,” stated local media outlet InfoMax.
Reportedly, Kang is facing a probe over his role in allegedly manipulating the stock prices of Bithumb affiliates -Inbiogen and Bucket Studio through the issuance of convertible bonds.
Bithumb executives have been under law enforcement’s scanner for some while. The exchange came into regulatory scrutiny further following the collapse of the Korea-based Terra ecosystem last year in May 2022. Earlier this month, the former chairman of Bithumb Holdings, the parent company of Bithumb-Lee Jung-Hoon, was acquitted on charges that he committed a $100 million fraud connected to the exchange.
On January 10, tax agents also raided the exchange’s headquarters in Seoul as a part of a compliance investigation. South Korea’s National Tax Service had opened a probe looking into possible tax evasion at Bithumb and its affiliates. However, this latest investigation into Kang and other Bithumb executives is separate from the tax evasion probe by NTS.
On January 13, the South Korean Supreme Court also ruled that Bithumb must pay damages to investors over a 1.5-hour service outage on November 12, 2017. According to a local news source, the damages are equivalent to $202,400 — 251.4 million in the regional currency won. BitHumb’s bad luck, however, didn’t start with 2023.
In December 2022, Park Mo(Bithumb’s largest shareholder), who was under investigation by local authorities for embezzlement and stock price manipulation, was found dead. In 2018, Bithumb was under a special tax investigation by the NTS, through which he won roughly $64 million in income tax.
