Former Bithumb Chairman Faces Eight-Year Prison Sentence For $85 Million Fraud

In a recent development, South Korean prosecutors have requested an eight-year prison sentence for Lee Jung-hoon, the former chairman of the board of directors of Bithumb, the country’s second-largest cryptocurrency exchange. 

The charges against Lee Jung-hoon involve violations of laws and regulations related to specific economic crimes, specifically fraud. The prosecution claims that Lee deceived BXA (Bithumb’s native coin) by falsely promising co-management and listing assistance to BK Group Chairman Kim Byung-gun.

Bithumb Scandal Deepens

The prosecution alleges that Lee’s actions resulted in approximately 110 billion won (around $85 million) in damages. They argue that Lee allegedly planned to shift the control of Bithumb to foreign companies to benefit from the exchange’s cryptocurrency while evading financial regulations. 

The prosecution further asserts that Lee possessed significant information imbalances and “intentionally passed” on various risks to the co-acquirer.

During the trial, the prosecution emphasized that Lee was aware of the difficulties in listing the BXA coin but failed to inform the victim. They contend that Lee intentionally omitted details regarding the challenges and presented misleading information during the contract negotiations. 

The defense, however, argues that there are inconsistencies in the victim’s statements and points out that the victim initially proposed the acquisition of Bithumb.

The defense also disputes the prosecution’s claim that President Kim, BK Group’s chairman, was unaware of BXA coin’s listing progress. They argue that President Kim exchanged messages with witnesses in January 2019, indicating his awareness of the listing process.

Lee Jung-Hoon’s Final Plea

In his final statement, Lee regretted the situation, stating that he believed President Kim would lead the company well and help it grow. He claimed to have acted in good faith as a seller and requested an extension to fulfill his obligations but was unexpectedly sued.

The trial for Lee Jung-hoon is set to continue, with the appeal scheduled for January 18 next year. 

This case is one among several scandals involving Bithumb executives. Notably, the owner of Bithumb, Kang Jong-hyun, was also recently arrested on charges of embezzlement and stock manipulation. 

The authorities have been cracking down on cryptocurrency-related crimes in South Korea, aiming to maintain integrity and security within the industry.

The current total market capitalization of the cryptocurrency market is $1.342 trillion, representing a -2.24% change over the past 24 hours. However, compared to the market cap from a year ago, there has been a remarkable 64.81% increase, indicating the industry’s long-term upward trajectory.

Bitcoin (BTC) remains the dominant force in the market, with a market capitalization of $709 billion, accounting for 49.59% of the total market cap, according to CoinGecko data. 

Featured image from Shutterstock, chart from TradingView.com