Former Bithumb Chairman Acquitted of Fraud Charges Again

On January 18th, the Seoul High Court acquitted Lee Jong-hoon, the former chairman of the South Korean cryptocurrency exchange Bithumb, for the second time on charges of fraud and deceiving investors out of $70 million, according to local media.

The lawsuit against Lee was filed by cosmetic surgeon and co-founder of the Blockchain Exchange Alliance consortium, Kim Byung-gun, in July 2021.

According to Kim, the former exchange chairman demanded an advance payment of 100 billion won (~$750,000) during negotiations for the acquisition of Bithumb Holdings in 2018.

In return, Lee allegedly promised to list the BXA token on the platform. However, instead, he sold the transferred coins for $25 million to BK Group. Retail investors also purchased tokens worth about $45 million.

Kim claimed that the Bithumb chairman embezzled the funds received. These charges could have led to a sentence of up to eight years in prison.

Lee’s lawyers denied the allegations, stating that the token sales were conducted under a “typical stock sale contract.”

Early last year, the Seoul Central District Court found Lee not guilty, as the evidence of his promises regarding the BXA listing was deemed insubstantial. The higher court has now upheld the verdict based on the same facts.

In January 2023, South Korean prosecutors issued an arrest warrant for Bithumb owner Kang Jong-hyun, suspected of embezzlement and manipulating the stock prices of several affiliated firms.

According to the investigation, his brother Ji Yeon, head of the exchange’s subsidiaries Inbiogen and Bucket Studio, assisted in stock manipulation through the issuance of convertible bonds.