Search and seizure at Bithumb for fraud investigation
Today police in the Gangnam district in Seoul raided Bithumb headquarters. The Crime Investigation Unit from Seoul Metropolitan Police performed search and seizure to confiscate pertinent financial records and business documents in relation to an ongoing fraud investigation.
Junghoon Lee, chairman of the board of directors at Bithumb Holdings and Bithumb Korea has been under sharp police scrutiny for over a year. Lee faces a tremendous legal hassle for his part in allegedly defrauding the Korean market. Lee, however, does not stand alone in his legal battle as former Bithumb chairman, Byungun Kim, joins him against law enforcement. The two men stand pointing the finger at each other culpability in the matter.
Today’s search and seizure indicates that the investigation is not moving forward in favor of either Lee or Kim. In early July, Lee returned to South Korea on court orders and is expected to appear promptly should the court order him to.
Defrauding the market
The fraud investigation stems from the 2018 sale of BXA tokens as part of a failed takeover of the Bithumb exchange by BXA Consortium. Investors expected Bithumb to list BXA Tokens use them to settle certain contracts on the Bithumb platform. Since 2018, BXA tokens have lost nearly all of their value and BXA Group ultimately defaulted on their final payment.
As one of the largest crypto exchanges in Korea, a market which is very active in investing in cryptocurrencies, Bithumb promoted BXA as an ambitious cryptocurrency platform which would serve global fintech outlets worldwide.
Some BXA token investors insist that Lee shares an equal share of responsibility for the ordeal as Kim. Both men own nearly exactly equal shares of SG Brain Technology Consulting PTE which owns BTHMB HOLDINGS PTE LTD. Furthermore, investors claim that Mr. Lee acted as the real director of the exchange in the background.
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