South Korea Police

South Korea police raid Bithumb exchange over alleged fraud: report

Agents from the Seoul Metropolitan Police Agency’s Intelligence Crime Investigation Unit have reportedly raided the offices of Bithumb, described as the largest digital currency exchange in South Korea, over fraud allegations.

In 2018, Bithumb hosted a private sale of Blockchain Exchange Alliance (BXA) tokens. When marketing the token sale it was advertised that BXA tokens would be listed on the platform after the exchange was acquired by BTHMB HOLDINGS PTE LTD, a company in which Singapore-based BK Group chairman Byung-gun Kim has the majority stake. The token sale had roughly 300 participants, BXA tokens were sold for 150-300 KRW each, and a total of KRW30 billion (US$25,723,932) was raked in through the ICO.

However, the Bithumb acquisition fell through, and BXA was not listed on the exchange. The BXA investors were holding tokens that had no utility and therefore the price of BXA tokens plummeted. Currently, one BXA is worth $0.00249, which is a 99% decrease from its high of $0.325 per token on February 26, 2019. According to reports from a local Korean news outlets, BXA token holders are looking to press charges against Bithumb for allegedly falsely advertising the BXA token sale.

Lee Jung Hoon, chairman of board at Bithumb Korea and Bithumb Holdings, is also reportedly being investigated by police for attempting to transfer assets overseas without reporting the transfer to the appropriate government agencies. 

The Bithumb raid and office seizure is the second raid on a South Korean digital currency exchange in just one week. On August 26th, South Korean Police seized Coinbit after an investigation revealed that Coinbit manipulated up to 99% of its total transaction trading volume.

It’s safe to say that South Korea is cracking down on digital currency service providers; or rather, the service providers that are committing some sort of fraud or embezzlement, and trying to get all of the bad actors out of their country.

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