South Korean authorities have arrested Kang Jong-Hyun, the former chairman of the cryptocurrency exchange Bithumb for embezzlement and market manipulation. According to the 2nd of February report from JTBC, a local media outlet, prosecutors accused Bithumb’s ex-chairman Kang Jong-Hyun of conspiring with a business partner to manipulate stock prices and stealing $49 million from his company.
According to the 25th of January report from Yonhap Infomax, a financial news agency, last month, the Office of Seoul Southern District Prosecutor had sought the arrest of Kang and two executives of companies associated with Bithumb, including his younger sister. According to the prosecutors, Kang owned Bithumb affiliates and took part in increasing the stock prices of these companies by revealing good news to the markets.
Kang Ji-Yeon, the young sister of Kang, is the chief executive of Inbiogen and Bucket Studio, which both are publically listed companies associated with Bithumb. However, Kang denied the allegations by saying that he no longer had a stake in these associated companies. This new arrest of Kang is unrelated to a separate probe into potential tax evasion at Bithumb, reported by Yonhap Infomax on the 10th of January.
Over the last few years, cryptocurrency exchange Bithumb has faced a steady stream of legal issues. And in Korea, some of the crypto exchanges survived a 2021 crackdown. Last month, Lee Jung-Hoon, another former chairman, was found not guilty of fraud accusations related to the exchange. And at one point when the founder of FTX, which was once the biggest cryptocurrency exchange in the world and now is nothing, was buying up crypto companies around the globe, the company reportedly pushed it onto Sam Bankman-Fried’s shopping list. But no official deal regarding this crypto exchange company was announced.