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$70M fraud: Bithumb’s ex-chair arrested in South Korea



The purported founder of Bithumb, South Korea’s largest crypto exchange, who is also an ex-chairman of the exchange has allegedly been apprehended on embezzlement charges. Also arrested was Jo Mo, the representative of the affiliated company who also doubles as an aide.

Kang Jong-hyun was reportedly detained on February 2 in connection with the claims of embezzlement, according to local media reports. On the 25th of January 2023, the Seoul Southern District Court issued an arrest warrant for the businessman with several allegations, including neglect of duty, market manipulation, and fraudulent transactions. This arrest warrant included his younger sister, Kang Ji-Yeon who serves as the CEO of two publicly traded Bithumb affiliates, Inbiogen and Bucket Studio. 

As a sequel to this arrest, Yonhap reported that the offices of Bithumb were recently raided as part of an investigation into price manipulation of a coin listed on the South Korean crypto exchange. This coin was not mentioned. 

Kang Jong-hyun is the elder brother of Kang Ji-yeon, the head of Bithumb affiliate Inbiogen. As the company holds the majority share in Vidente, Vidente is also the largest stakeholder in Bithumb with a 34.2% stake.

Kang Jong-hyun was accused of colluding with a business colleague to manipulate stock prices and stealing $70 billion from his company. The brothers, according to the prosecution team, planned to use convertible bonds to steal money from Inbiogen and the video production company Bucket Studio and manipulate stock prices.

The CEO of Bucket Studio, Kang Ji-yeon, issued an apology to the company’s shareholders and claimed that the allegations against his brother were “unconfirmed,” adding that he would assist the authorities in their inquiry.

The largest bitcoin exchange in the nation was previously the subject of a probe by the South Korean National Tax Service agency. The investigative team reportedly searched the Bithumb offices in Seoul as part of the ongoing tax inquiry.

As part of the investigation’s findings, Park Mo became the subject of the investigation as he was accused of embezzlement and market manipulation. However, he was found dead in his home in December 2022. It was speculated that he committed suicide as a result of the investigation.

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