- South Korean authorities have arrested Kang Jong-Hyun, the former chairman and suspected owner of Bithumb.
- Prosecutors were seeking Jong-hyun’s arrest for multiple charges related to embezzlement, market manipulation, etc.
- The crypto exchange has been under scrutiny from several South Korean agencies including the National Tax Service.
Bithumb’s former Chairman Kang Jong-hyun was arrested earlier today by South Korean law enforcement on charges related to market manipulation and embezzlement, among other things. The arrest came a week after prosecutors asked the Seoul Southern District Court to issue a warrant for the same.
According to a report by a local media outlet, Kang Jong-hyun is believed to be the actual owner of South Korea’s second-largest crypto exchange Bithumb. He is reportedly accused of conspiring with a business partner to manipulate stock prices and steal 60 billion won (nearly $50 million) from his company.
The prosecutors believe that Kang Jong-Hyun colluded with his associates to embezzle corporate funds and engage in market manipulation. The former Bithumb executive’s younger sibling Kang Ji-yeon is the chief of Inbiogen, a firm that holds a majority stake in Vident. With a 34.22% stake in Bithumb, Vident happens to be the largest shareholder of the crypto exchange.
As per the report, Kang Jong-Hyun and Kang Ji-Yeon perpetrated a scheme to manipulate the share prices of Inbiogen and Bucket Studio by issuing convertible bonds. In an apology to shareholders, Kang Ji-Yeon described the claims against his brother as “unconfirmed”.
The prosecution believes that Mr. Kang has been directly involved in management by actually owning Bithumb affiliates, and also led the process of boosting stock prices by disclosing good news,” the report read.
Lee Jung-Hoon, former Bithumb Chairman, was acquitted last month on charges related to a $100 million fraud associated with the crypto exchange. The crypto exchange is under investigation by the country’s National Tax Service for potential tax evasion.
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