South Korea Police Reportedly Seized Bithumb Over Alleged Fraud


South Korean police have reportedly raided and seized Bithumb, the largest cryptocurrency exchange in South Korea. Seoul Metropolitan Police Agency has reportedly conducted search and seizure investigations at Bithumb’s office.

September 2, 2020 | AtoZ Markets – According to a local publication report, Seoul Shinmun, an intelligence crime unit at the capital city Seoul Metropolitan Police Agency, has reportedly conducted search and seizure investigations at Bithumb’s office in the Gangnam District.

As reported, however, the latest actions are purportedly connected with an ongoing police investigation involving Lee Jung Hoon, chairman of the board at Bithumb Korea, and Bithumb Holdings. The exchange has been under investigation for alleged economic fraud. 

South Korean police seize Bithumb for allegedly committing fraud

Bithumb allegedly committed fraud involving around about 30 billion won ($25 million) in BXA tokens, the native digital token of the crypto exchange. It allegedly sold these tokens ahead of its possible acquisition by Singapore-based BK Group, but the deal did not go through.

The investors in these tokens faced losses because the South Korean exchange did not list them on its platform for trading. A media outlet earlier pointed out that a few investors participating in the sale even lost millions of dollars.

The crypto exchange has reportedly issued BXA tokens in 2018 concerning its acquisition by Singapore-based BK Group. Nevertheless, Bithumb is the country’s largest cryptocurrency exchange and the ninth-largest by average daily trading volume globally.

South Korean authorities seized crypto exchange Coinbit 

This is the second of such police raids on a top South Korean crypto exchange. As AtoZ Markets reported, South Korean police have seized local Coinbit for an alleged crypto wash trade. According to the Seoul Shinmun report, crypto exchange Coinbit’s offices have been raided for authorities’ alleged fraud. The crypto exchange allegedly used multiple “ghost accounts” to inflate trading volumes.

About 99% of Coinbit’s trading volume has been allegedly manipulated in recent months. This, however, has resulted in “unfair profits” of at least $84 million for the crypto exchange. Consequently, Coinbit has now halted operations amid an ongoing investigation by the police, reported Sahil Kohli. 

Moreover, crypto exchanges in South Korea might face stricter regulations in 2021. The reason is that the regulators have recently amended a law that will officially bring cryptocurrencies under its legal system.

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