According to reports out of South Korea, a man named Kang Jong-Hyun was recently detained on suspicion of embezzlement, breach of trust, and fraudulent unlawful activities after he was shown to be a shareholder and a key decision maker at the cryptocurrency exchange Bithumb.
Kang Jong-Hyun was taken into custody on February 2, 2023. It is reported that on January 25, 2023, an arrest warrant was issued by the Seoul Southern District Court for several offences including desertion of duty, market manipulation, and fraudulent transactions.
Convertible bonds were used in a conspiracy between Jong-Hyun and his sister Kang Ji-yeon, the CEO of Bithumb affiliate Inbiogen, to influence the stock prices of Inbiogen and video production business Bucket Studio. A note posted on the Bucket Studio website revealed that Ji-yeon had extended an apology to the company’s stockholders. Moreover, Ji-yeon said that he planned to assist law enforcement in their probe. According to reports, the Bithumb headquarters in Seoul was raided as part of the ongoing tax investigation.
Kang, who has also been recognised as a previous chairman of the exchange, was publicly linked to Vidente (121800), a publicly listed broadcasting equipment firm and a stakeholder of Bithumb Korea.
According to local media, South Korean authorities have been seeking Kang’s arrest along with two other executives, including his younger sister, Kang Ji-Yeon, the CEO of two publicly listed Bithumb affiliates, Inbiogen (101140) and Bucket Studio (066410), since last week.
The arrests have occurred at a difficult time for Bithumb. Its headquarters were searched on a Thursday last week as part of a probe into alleged price manipulation of a cryptocurrency trading on the platform. While former Chairman Lee Jung-Hoon was acquitted in January of allegations that he perpetrated a $100 million fraud related to the exchange, the National Tax Service started an inquiry into alleged tax evasion at Bithumb Holdings and its affiliates last month.
