Arrest warrant issued for owner of Bithumb exchange

The Seoul Prosecutor's Office is currently investigating the theft of funds and fraudulent schemes by the top management of the Bithumb cryptocurrency exchange. They issued an arrest warrant for Kang Jong Hyun, who in turn is known as the owner of a subsidiary of Bitsum.

South Korea's legal community reports that Chief Prosecutor Chae Him Ahn of the Second Financial Investigation Division of the Seoul Southern District Prosecutor's Office ultimately delivered a verdict to Kang and two other executives of Bithumb's subsidiaries. Che Him Ana found that the defendants abused the trust of their clients and engaged in exorbitant spending of their money. Earlier, the owner of the American cryptocurrency exchange FTX, Sam Bankman-Fried, along with other executives, received accusations on the same counts, and it seems that these things can be observed in relation to other cryptocurrency platforms.

In addition, the prosecutor's office recognized Kang Jong-hyun and other heads of Bithumb subsidiaries in violation of other laws related to the world of finance. They will be punished under the Capital Markets Act. Ultimately, the decision was made to issue an arrest warrant to detain Jong Hyun and clarify all the circumstances.

Notably, Kang Jong Hyun's younger brother, Ji Yong, is the CEO of Bithumb's two subsidiaries, Inbiogen and Bucket Studio, so he was also likely involved in the scam.

The main accusation against Jong Hyun was the manipulation of stock prices of companies owned by his younger brother. As a method of manipulation, experts called the issuance of convertible digital bonds.

Prosecutors from the Second Financial Investigation Division of the Seoul Southern District Prosecutor's Office were able to discover the circumstances under which Jong Hyun was able to take advantage of the situation. In October, when the FTX exchange fell, a Korean entrepreneur became active, as a result of which the authorities decided to arrest and search Bithumb affiliates. The list of organizations searched included not only Inbiogen and Bucket Studio, but also Vidente.

The latter is known for owning the largest stake in Bithumb Holdings. 34.2% of the securities of the above-named holding are located in her possessions.