South Korean authorities have launched a mandatory investigation into cryptocurrency exchange Bithumb. The probe began with a raid at its headquarters in Yeoksam-dong.
The Seoul Southern District Prosecutors’ Office led the search today, on March 20th. Authorities are also investigating other Bithumb sites.
Allegations of Misused Funds
Prosecutors suspect that Bithumb provided company money to its former CEO. The funds were used to purchase an apartment in Seongsu-dong, Seoul. The exchange reportedly deposited 3 billion won ($2.04 million) to secure the property for Kim Dae-sik.
Kim is the former CEO and now serves as an advisor. Some of this money is believed to have been used for his gain. This allegation has raised serious concerns about how company funds are handled.
The case deepens worries about mismanagement at the exchange. It comes at a time when strict oversight is needed in the crypto sector. The move shows that regulators are not hesitant to act when misconduct is suspected.
Also Read: Bithumb To Overhaul Crypto Listing Process After Ex-CEO Embezzlement Case
Regulatory and Legal Background
The Financial Supervisory Service has also begun investigating these allegations. They have recently passed the case to the prosecution. This investigation is not the first legal issue for Bithumb. Earlier, the exchange was raided over a separate inquiry.
Authorities were looking into possible price manipulation of a coin traded on another crypto platform. The coin in question was not named.
In addition, Bithumb announced major reforms in December 2024. These changes followed the conviction of Lee Sang-jun, the former CEO of Bithumb Holdings. Lee was sentenced to two years in prison for accepting bribes.
He was found guilty of directing his team to list specific altcoins. This conviction marked a significant moment in Bithumb’s history. It led the exchange to tighten its listing processes.
Impact on the Crypto Market
These ongoing investigations add to the growing scrutiny of the crypto market in South Korea. The probes have put a spotlight on corporate practices within the industry.
Investors and users are watching closely. The actions by the prosecutors are seen as part of a wider effort to clean up the market. Such measures may help restore trust in digital asset trading.
The investigation into Bithumb may have long-lasting effects on the crypto sector. It could lead to stricter internal controls and improved oversight.
Authorities aim to ensure that all companies follow the rules and protect investors. This probe is a reminder that mismanagement will be met with firm action. In conclusion, the mandatory investigation against Bithumb signals a strong regulatory stance.
Also Read: Bithumb Announces Gnosis (GNO) Listing On KRW Market, $GNO Price Surges 25%