South Korea: Prosecutors seek 8-year jail term for Bithumb’s ex- chairman

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South Korean prosecutors are urging the courts to impose a prison sentence of at least eight years on Lee Jung-hoon, the former chairman of digital currency exchange Bithumb over fraud charges.

Lee was taken to court in connection with his role in the KRW100 billion ($69.7 million) fraud case involving the listing of Bithumb Coin (BXA) tokens. In 2018, Lee proposed to sell the exchange to BK Group, convincing its chairman, Kim Mo, to make a down payment of KRW112 billion ($78.12 million), which was subsequently sold to investors.

Things turned ugly after Bithumb failed to list BXA, and BK Group’s acquisition of the exchange fell through. Thousands of investors suffered losses running into millions of dollars while prosecutors ruled that Kim had no case to answer as Lee defrauded him.

“The amount of damage is very large, and the damage is especially great for ordinary investors,” the prosecution told Chief Judge Kang Gyu-tae of the Seoul Central District Court.

The prosecutors are hinging their argument on the legislation on Aggravated Punishment of Specific Economic Crimes to push for a minimum eight-year jail term. However, Lee’s lawyer says his client is not guilty of any wrongdoing, saying that the contract followed due process. Lee’s defense also contended that BK Group was trying to avoid criminal responsibility for their role in the debacle.

“Bithumb was the number one exchange in Korea at the time of sale,” Lee said in his final statement. “I am very sorry for making it difficult for employees and causing social pressure.”

Both parties to the matter watch with bated breath ahead of the sentencing on December 20.

South Korea’s Web3 founders are enduring a rough patch with the law

Founders operating in South Korea’s digital asset industry are going through a torrid patch with law enforcement agencies over perceived breaches of regulations. The most infamous of these founders is Terra founder Do Kwon, who is currently wanted for his role in the collapse of the network that led to billions of losses for investors.

The Ministry of Interior voided Do Kwon’s passport while Interpol issued a ‘red notice’ for his capture. Meanwhile, police raided Terra co-founder Daniel Shin’s home in connection with the Terra implosion.

In September, South Korean authorities arrested 25 Kimchi premium operators on charges of making over $75,000 in illegal BTC trades. Investigators have also been carrying out raids on the offices of digital exchange operators in the country as traders hope that the intensity of the crackdown cools.

Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets