Bithumb Top Executives Indicted for $88 Million Fraud in Hong Kong

Bithumb cryptocurrency exchange top executives face fraud charges brought against them by former partners in Thailand.

July 7, 2021, | AtoZ Markets – Senior executives at Bithumb, a major South Korean cryptocurrency exchange, are accused of fraud by the exchange's former Thai partner, The Korea Times is reporting.

Charges of violation of contractual obligations were brought against two subsidiaries of the exchange, located in Hong Kong. These are the Hong Kong divisions of Bithumb Global and GBEX. They fall under the scope of a civil action. Meanwhile, Bithumb's top management faces a full-fledged fraud lawsuit.

Bithumb has tried through partnerships to launch and promote divisions of its trading platform in a number of countries, notably Japan and Thailand, but these plans have been unsuccessful. According to the allegations made, in fact, Bithumb did not even intend to launch an exchange in Thailand. Its true goal was only to promote the controversial BXA coin in local markets.

However, the BXA tokens were never listed on Bithumb and the platform did not open in Thailand as a result. The management of the exchange unilaterally abandoned its plans, which brought great losses to regional partners and investors.

This was the reason for the KRW 100 billion fraud lawsuit against Bithumb. The key figure in the case is Lee Jong Hoon, who promoted the BXA coin and allegedly managed to attract about 112 billion won ($88 million) from investors.

The Thai partners decided to file a claim in the Hong Kong jurisdiction. They claim that they have previously filed a complaint with the South Korean authorities about Bithumb's unfair business practices, but they still have not taken any action. In addition, the plaintiff intends to file a similar claim in Japan.

Bithumb is out of tune with the law

It should be noted that the new lawsuit in Hong Kong is not the exchange's only problem at the moment. Bithumb came under the sights of regulators in its native Korea as the authorities tightened the screws on the cryptocurrency market.

Earlier, AtoZ Markets reported in September 2020 that South Korean law enforcement agencies conducted search and seizure investigations at Bithumb’s office in the Gangnam District. At that time, the exchange was suspected of fraud in the amount of more than $20 million associated with the listing of the same BXA coin.

At the same time, the head of Bithumb, Lee Jong Hoon, was also closely investigated - also on charges of large-scale fraud on a whole list of items.

In addition, back in June, the UK Financial Conduct Authority (FCA) accused 111 crypto companies of illegal work in the country. The British regulator named the Bithumb exchange among such unregistered companies.

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