Lee Jung-hoo, chairman of the Board of Directors of Bithumb Holdings and Bithumb Korea, has been summoned to court.
According to a report from the local South Korean news outlet Yonhap, Lee has been sued for fraud related to Bithumb’s 2018 Blockchain Exchange Alliance (BXA) token sale. BXA investors claim that they suffered damage because when Bithumb promoted the token sale they did so as if it were to be subsequently listed on the Bithumb digital currency exchange.
Lee is also being sued for “evading property.” Authorities say that Bithumb executive attempted to transfer assets overseas without reporting the transfer to the appropriate government agencies.
The ongoing Bithumb fraud investigation
The Bithumb exchange, its chairman, and the major Bithumb shareholder Byung-gun Kim are currently under investigation for fraud. On September 16, Korean accounting firm Samjong KPMG seized BK Group chairman Byung-gun Kim’s shares in Bithumb. Byung-gun Kim reportedly played a significant role in the BXA token sale.
At the time of the token sale, it was believed that Byung-gun Kim was going to acquire the Bithumb exchange and that upon the acquisition, BXA tokens were going to be listed on the exchange. However, the acquisition never happened which led BXA token investors to experience significant losses on their BXA token investment.
Before the Seoul Central District Court made the ruling to seize Kim’s shares, the South Korean police raided Bithumb’s offices on both September 2 and September 7.
More South Korea digital currency exchanges are under investigation
Bithumb is not the only exchange in South Korea that is currently under investigation on fraud charges. On August 26, South Korean police raided Coinbit after an investigation revealed that Coinbit manipulated up to 99% of its total trading volume.
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