- Former Bithumb Korea Chairman Lee Jung-hoon has been handed to prosecutors in the fraud case against him
- Lee was involved in the failed takeover of Bithumb Korea in 2018 and 2019
- Investors lost over $25 million when the sale collapsed
The former chairman of Bithumb Korea, Lee Jung-hoon, has been handed over to prosecutors who are investigating a potential fraud case against him. According to Coindesk Korea, Lee could face charges of defrauding investors in relation to a failed takeover of the exchange in 2018-19 which saw investors lose out on more than $25 million when the buyer pulled out.
Bithumb Korea Raid Leads to Potential Fraud Charges
Bithumb was raided in September last year as part of a dual investigation into Lee, with the Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit taking the action on the back of a failed takeover deal between Bithumb and BK Global Consortium. Lee was being investigated at the same time for “escape of property” when he tried to take some of his Bithumb shares out of the country without informing the relevant authorities, although these charges have now been dropped.
Failed Buyout Leaves Lee on the Hook
In 2018 Lee oversaw the attempted sale of Bithumb Korea to BK Global Consortium for 400 billion won ($333 million). As part of the sale, BXA tokens were to be minted and sold on the Bithumb exchange, with the company going so far as to undergo a presale for the tokens. 300 participants spent a total of 30 billion KRW ($25.7 million) on these BXA tokens, but the sale collapsed in September 2019 when BK didn’t put their money where their mouth was.
As a result of the collapse of the Bithumb Korea sale the value of the BXA tokens evaporated overnight, leading to furious investors suing Lee over their loss, with Lee now looking likely to face the music. He has yet to be formally charged, but the fact that he has now been handed over to prosecutors by police suggests that the case against him is intensifying.
