Ex Bithumb Chair Faces Prison for $70 Million Crypto Fraud

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  • The former head of Bithumb is in court over an alleged $70 million fraud
  • The claims date back to the failed sale of the exchange in 2019
  • Lee Jung-hoon is accused of profiting from the aborted takeover

The former head of Bithumb, Lee Jung-hoon, faces up to eight years in prison for allegedly orchestrating a $70 million cryptocurrency fraud. The allegations stem back to a failed takeover of the exchange in 2019, which saw investors lose out on more than $25 million when the buyer pulled out, and Lee could finally be on the hook for defrauding them. Local media reported on the initial stages of the case, which included Bithumb’s offices being raided in September 2020.

Failed Bithumb Sale Resulted in Massive Losses

The charges relate to a failed bid from Singapore-based BK Global Consortium to buy Bithumb in 2019. The sale involved the creation of BXA tokens, which brought in a 30 billion KRW investment (around $25.7 million) from the public, but the sale collapsed in September 2019 when BK failed to pay.

The BXA tokens became worthless overnight, while Lee and Bithumb kept the money, leading to furious investors suing Lee over their loss.

Lee Says Sales Was Carried Out “Faithfully”

Prosecutors allege that Lee had no intention of listing the BXA token as it was part of an elaborate ploy to defraud his partner. During a hearing before the Seoul Central District Court, this week prosecutors said that “the amount of damage is very large, and the damage is especially great for ordinary coin investors.” In return, Lee’s attorney claimed that the token sale was “faithfully” carried out according to the usual procedure.

In a statement, Lee apologised for his actions, saying that he is “very sorry for making it difficult for employees and causing social pressure.”