South Korean cryptocurrency exchange accused of $ 70 million fraud

Seoul prosecutors have asked the court to sentence the owner of the cryptocurrency exchange Bithumb to eight years in prison. He is accused of fraud in the amount of 100 billion Korean won, which is equivalent to about $ 69.45 million. The request was made during the trial of Lee Yong-hoon, the former chairman of the board of directors of Bithumb Holdings and Korea. The prosecutor explained that he was requesting a longer prison term because the amount of total losses was very large, and ordinary small investors suffered.

In October 2018, Lee offered BK Group Chairman Kim Mo to buy Bithumb. Bithumb Coin (BXA) was issued for this transaction. After conducting an ICO and selling the token to trusting investors, Kim Mo used part of the proceeds from the previous sale of BXA to buy back his stake in Bithumb. However, the BXA digital coin never became an officially registered asset in South Korea. Due to such fraud, Lee Yoon-hoon was charged in a number of cases.

The defendant’s lawyer assures that his client is innocent of anything, and the structure of this case is a typical share purchase agreement. According to him, the negotiations were conducted with the participation of lawyers and professional consultants, and no one had any questions before. The lawyer assured that the contract was fulfilled in good faith, and Kim sued Lee to avoid criminal liability himself due to the claims of victims who suffered from the failed investment.

According to the official data of the South Korean government, in the first half of 2022, fraudsters carried out cryptocurrency transactions totaling more than $ 1 billion. According to law enforcement officials, the rate of fraudulent transactions with digital assets from January to June 2022 exceeded the total amount of the same transfers for the entire year 2021. At the end of August, South Korean officials closed access to 16 cryptocurrency exchanges and banned other crypto platforms from serving addresses associated with exchanges, which resulted in thousands of users losing access to their cryptocurrency funds.