Bithumb ex-chair could face up to 8 years in prison in South Korea

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South Korean prosecutors are pushing for an eight-year prison sentence for former Bithumb chair Lee Jeong-hoon, local news outlets report.

Prosecutors in Seoul accuse Lee of defrauding KRW100 billion (US$77.6 million) in the acquisition of Bithumb exchange by Kim Byung-gun, one of Korea’s top cosmetic surgeons. Kim allegedly paid the money to Lee, who headed the exchange then, as a down payment for the purchase.

However, the transaction rested on the condition that the exchange lists BXA, a token developed by the Blockchain Exchange Alliance, an organization whose formation Kim was highly involved.

Lee knew that Bithumb couldn’t list BXA due to regulatory constraints, prosecutors allege. He still took the money, and he didn’t refund Kim when the deal fell apart.

In his sentencing hearing earlier this year, Lee was acquitted of his charges. As Seoul Economic Daily reports this week, the prosecutors have filed an appeal and want the court to sentence him to eight years behind bars for fraud.

In their filing, the prosecutors claim that Lee attempted to change the governance structure of the exchange to skirt regulatory requirements for the BXA token listing, but it didn’t pan out.

Lee’s lawyers sought to discredit Kim’s statement, which they claim is the only evidence the prosecution has.

“The prosecution is representing the accuser’s position without filtering, so the credibility of the indictment is low,” one of the lawyers claimed.

In the sentencing hearing earlier this year, the Seoul court acquitted Lee based on the insufficiency of the prosecution’s evidence.

“We cannot accept that the defendant committed to listing BXA based solely on the evidence submitted by the prosecution,” the judge ruled at the time.

The sentencing hearing is on January 18, 2024.

Launched in 2015 as Xcoin, Bithumb is considered one of the world’s largest exchanges and the second largest in South Korea after Upbit. It’s seeking to go public by 2025 on KOSDAQ and has selected Samsung Securities as the underwriter.

By going public, the exchange is looking to change the perception of digital asset exchanges as opaque and shady businesses and introduce a new era of transparency.

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