The former chair of the cryptocurrency exchange Bithumb may be sentenced to jail time.
According to Yonhap, the former CEO of the bitcoin exchange platform Bithumb, Lee Jung-hoon, is facing up to eight years in prison on fraud charges.
In 2018, BK Group of Singapore attempted to acquire the cryptocurrency exchange Bithumb by selling its tokens, BXA. Lee pre-sold BXA tokens to BK Group for $25 million to complete the deal. An estimated $45 million was made from selling these coins to investors. This case involves a possible fraud involving the sale of BXA tokens.
Conversely, Bithumb’s decision not to list BXA reportedly caused significant financial losses for traders. In this case, the investors accused Lee and Kim Mo, head of the BK Group, of fraud.
The South Korean investigative agency had already determined that Kim had nothing to hide. The investigation team concluded that Kim was a victim to the same extent as the rest.
The group’s chairman, Kim Byung-Gun, is also implicated in the fraud, but he is not the subject of a police inquiry. Two recent police raids on Bithumb led to the summons.
On Wednesday, the Seoul Central District Court reportedly seized Kim’s shares in Bithumb. Samjong KPMG, an accounting firm, apparently oversaw the seizure.
Sentence out by mid-December
Under the country’s Act on the Aggravated Punishment of Specific Economic Crimes, the government demands that Lee be found guilty of fraud. “The amount of harm is enormous, and the loss is especially great for ordinary coin investors,” the prosecution stated during a Seoul Central District Court hearing.
However, Lee argued that the token sale was legal since it was structured like a stock sale contract. The defence also asserted that Kim, the CEO of BK Group, was trying to escape criminal charges related to the BXA token sale fiasco.
On December 20th, the court will hold a sentencing hearing.
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