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Bithumb chairman returns to Korea for BXA fraud case

Bithumb Korea and Bithumb Holdings chairman Junghoon Lee returned to South Korea this week to continue with charges of fraud with Byunggoon Kim, chairman of BK Medical Group, over the BXA token issuance scandal. Lee is also known as the outright owner of the Bithumb cryptocurrency exchange, South Korea’s largest.

Both Lee and Kim are in South Korea now in quarantine, and are both currently battling charges of fraud. Upon safe completion of their quarantine period, they will meet in court to continue the BXA token scandal which has undermined investor confidence in Bithumb since 2019.

Chairmen Kim and Lee are engaged in a battle over responsibility for initiating the promotion and issuance of BXA Token. BXA token was at first touted as Bithumb’s future native token but that arrangement never worked out. When the deal fell through, investors cried foul and pressed charges against chairmen of the exchange and its holding company. Damages from that case are currently estimated around $25 million.

Chairman Lee said, “[All responsibility lies with Kim, who was then the CEO of BK Consortium.]”

Police are reportedly investigating reports that Chairman Kim attempted to conceal pertinent information from authorities regarding the exchange of his shares in Bithumb Holdings to the current owner. Kim insists that his disposal of shares was not a capital transaction under the FOREX Transactions Act in South Korea, and therefore did not require full disclosure as other capital transactions normally would.

It is thought that Chairman Lee returned to South Korea when Kim’s comments regarding his denial of culpability surfaced. Lee’s motivations for returning to South Korea, however, cannot be confirmed by Bithumb Korea officials.

BXA Token, BXA Consortium, and Charges of Fraud

The problem between Lee and Kim stems from the period shortly after Kim made a winning bid to acquire Bithumb in early 2019 through his BK Group. The acquisition of the exchange failed, however, because the final payment was not remitted by the deadline of September 30th of 2019. Vident, one of Bithumb Holdings’ shareholders, pledged to acquire 2,324 shares of Bithumb Holdings’ shares from BTHMB Holdings for nearly 1 billion dollars. This led Vident to become the largest single shareholder of Bithumb Holdings.

BXA and Winguard Trust comprise two international complainants against Bithumb Exchange and all parent holding companies. Investors in BXA Token, the token once touted as the future native token on the Bithumb platform, have come up so short that their BXA Token holdings now account for a very small fraction of the initial investment they made, and feel betrayed. The full backstory about the BXA token scandal can be found here.

By the end of 2019, the exchange had completely pivoted away from BXA Token to announce the launch of their own BithumbChain and subsequent Bithumb Token.

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