No government is taking fraud cases involving cryptocurrency with levity, in this light, the South Korean police have reopened crypto exchange Bithumb’s fraud case.
It appears that Bithumb’s problems aren’t going to go away anytime soon! The Bithumb fraud case involving the former chairman of the exchange was reopened by South Korean police on Monday, August 2.
The announcement comes less than a month after Hong Kong regulators accused top Bithumb officials of a fraud case in July.
Following this, a group of 14 investors filed their second case of fraud. Bithumb’s previous chairman Lee Jung-hoon is being investigated by the Seoul Metropolitan Police Agency.
Kim Byung-gun, chairman of BK Group, is also tied to the fraud case and is currently under investigation, according to local daily The Korean Herald. According to the publication:
In the complaint, the investors said they had offered 718 bitcoins and 7,793 Ethereum, worth 6.92 billion won ($6.01 million), to Kim in October 2018 after he vowed to take over Bithumb Korea and said an unlisted coin called BXA would get issued and listed.
Kim’s pledges to investors and the media have shown to be hollow. The takeover of Bithumb Koran never happened since the money from the investors went to Lee. The investors also claimed that Kim and Lee were complicit in the scheme.
Bithumb Korea was supposed to be sold in September of this year. According to sources, Kim paid Lee $100 million but did not pay the remaining sum. Furthermore, the BXA IPO did not take place as planned, resulting in enormous losses for investors.
Following investor concerns, the South Korean police began a similar inquiry last year. As previously stated, Lee was indicted by the Seoul Police Department last month for scamming Kim of $1 billion.
With the current filing, a group of 14 investors has provided the police with fresh proof in the form of recordings. Regulators all across the world have taken a harsh stance and begun pursuing questionable exchanges. The regulatory landscape for bitcoin is changing all around the world.