- South Korean law enforcement investigates Bithumb CEO over alleged bribery for listings.
- Coinone also faces similar allegations against a former employee.
- Other South Korean exchanges, including Korbit, Gopax, and Upbit, are under investigation for illegal listings.
Law enforcement officials in South Korea are currently conducting an investigation into Lee Sang-jun, the CEO of Bithumb, over allegations that he accepted bribes in exchange for listing digital currencies on the platform, as per sources.
The Seoul Southern District Prosecutors’ Office has confirmed that they are investigating Lee Sang-jun, CEO of Bithumb, but have not provided any further details regarding the scope of the investigation. This follows a police raid on both Lee’s private residence and Bithumb’s office complex, which aimed to gather incriminating evidence.
Apart from Bithumb, Coinone, another South Korean exchange, is also being investigated over similar allegations against a former employee who reportedly accepted bribes to list certain tokens on the platform. The prosecution has not revealed the identity of the ex-employee, citing South Korean privacy laws.
Moreover, Chosun Biz, a local media outlet, reported that the bribery scandal related to listings has expanded to include several other top digital currency exchanges in South Korea. According to the report, law enforcement agencies are currently investigating Korbit, Gopax, and Upbit for their alleged illegal listing of tokens.
In South Korea, exchanges are responsible for token listings, operating under the Digital Asset Exchange Joint Consultative Body (DAXA), which comprises leading platforms. However, DAXA’s operations have come under scrutiny after four top exchanges delisted the native token of game publisher Wemade.
To establish better oversight, South Korean regulators are proposing a new legal framework that would require token issuers to seek approval from financial authorities. This proposal is expected to be included in the upcoming Digital Asset Basic Act, which will provide an all-encompassing regulatory framework for digital currencies and exchanges.
According to the proposed law, tokens will only be exempt from regulatory scrutiny if they are already listed on major exchanges. However, it is uncertain whether DAXA will relinquish its authority.
The recent collapse of Terra’s ecosystem led to a stern response from regulators, including multiple raids on exchange offices and a revamp of the current legal framework for digital currencies.