- Bithumb, South Korea’s biggest exchange, has been raided by Seoul police
- The raid seems to be linked to an ongoing investigation into its chairman Lee Jung Hoon
- The raid could also be related to a failed takeover bid last year
Bithumb, South Korea’s biggest cryptocurrency exchange, has been raided by Korean police as part of dual investigations into its chairman, Lee Jung Hoon. According to local media, the head offices were raided yesterday by The Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit on the back of a fraud investigation into Hoon, the chairman of Bithumb Korea and Bithumb Holdings, although the raid could also be to do with aspects of a failed takeover bid last year.
Bithumb Raids Linked to Chairman’s Activities
The reasons behind the Bithumb raid, which have not been publicly stated, would seem to relate to two episodes involving Hoon and Bithumb. In 2018 Hoon was in charge of the attempted sale of Bithumb to Singapore-based BK Global Consortium for 400 billion won ($333 million at the time). Part of the sale involved the creation and launch of BXA tokens on the Bithumb exchange, with the company going so far as to undergo a presale for the tokens, where 300 participants spent a total of 30 billion KRW (around $25.7 million) on them.
However, the sale, which was extended twice, eventually collapsed in September 2019 when the buyer didn’t stump up the cash. As a result the value of the BXA tokens evaporated overnight, leading to furious investors suing him over their loss.
Hoon Arrested on Fraud Charges
Hoon is also in trouble following his arrest on “escape of property” charges earlier this year after he tried to take some of his Bithumb shares abroad without informing the relevant authorities. While it is not known which of these cases is the reason for the Bithumb raid, it seems likely that either one or both have played a part.
Some attributed the news to a near $1,000 drop in the Bitcoin price on Wednesday, but it is tough to see why the two events would be connected.