Barely weeks after a “special tax investigation” was carried out against Bithumb, South Korea’s largest exchange has been raided by Seoul Southern District Prosecutors’ Office.
According to a report from Yonhap News Agency, the prosecutors raided the Bithumb’s offices to gather evidence on the allegations of price manipulations and other unsavory business practices relating to local tokens. The tokens in question are Pixel Coin and GoMoney2, which have been under law enforcement’s radar for several weeks.
Investigators allege that certain unscrupulous individuals may have notched unfair gains following price manipulation of the tokens. However, an official of the Seoul Southern District Prosecutors’ office clarified that the raid has little to do with Bithumb while another raid is being planned against Coinone and Upbit exchanges.
“This is a search and seizure to secure the transaction details of a specific coin and it has nothing to do with Bithumb,” the official said.
At the time of reporting, GoMoney2 is still listed on Bithumb, but Pixel Coin did not scale through the exchange’s listing process. On the other hand, local exchanges like Coinone and Upbit delisted Pixel Coin on grounds of failing to meet internal requirements.
Raids on the premises of virtual currency exchanges are not an oddity in South Korea as regulators try to take a hands-on approach to police the industry. The active approach took off following Terra’s implosion in early 2022, leading to a raiding spree on the offices of leading exchanges like Upbit, Bithumb, and Korbit.
Aside from law enforcement, the country’s judiciary has also upheld judgments against the delisting of tokens that fail to make proper disclosures. In December, the Seoul District Court supported the decision of a coalition of exchanges to delist Wemade’s Wemix tokens for failing to reveal the number of outstanding tokens.
New day, new troubles for Bithumb
Bithumb’s frequent run-ins with South Korea’s prosecutors are fast becoming the norm as the exchange currently juggles multiple cases in court. Prosecutors applied for an arrest warrant against Bithumb’s chairman Kang Jong-Hyun over allegations of fraud and embezzlement.
The exchange has been placed under the crucible of the National Tax Service (NTS) for alleged cases of tax evasion while its largest shareholder Park Mo was found dead amid swarming embezzlement charges.
Despite the tsunami of legal battles around the exchange, Bithumb recorded a victory after the courts cleared its ex-chairman Lee Jung-Hoon of fraud charges.
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