Bithumb executive faces investigation for alleged bribery in South Korean crypto listing

South Korean prosecutors are investigating Lee Sang-jun, CEO of local cryptocurrency exchange Bithumb’s holding company, for alleged bribery by listing certain cryptocurrencies on the platform, Seoul’s South District Prosecutor’s Office said.

See related article: South Korea arrests the head of the Bithumb crypto exchange for alleged embezzlement

Fast facts

• Prosecutors in Seoul’s southern district raided Bithumb Holdings and Lee’s private residence earlier this month, prosecutors said in a text message to Discard on Monday. The office declined to provide additional details about the investigation, such as when the raid took place and Lee’s whereabouts. The investigation adds to the list of allegations piling up against Bithumb executives.

• A former employee of Coinone, the country’s third-largest crypto exchange by trading volume, is also being investigated for allegedly taking bribes to list specific cryptocurrencies, prosecutors said in the text message. The office declined to provide the person’s full name, citing South Korean privacy laws.

• A Coinone spokesperson confirmed the investigation Discard via text message on Monday, but declined to provide further comment. Bithumb has yet to respond Discardits request for comments sent via text message Monday morning.

• Local news agency Chosun Biz reported that prosecutors have evidence that other local exchanges such as Upbit, Korbit and Gopax allegedly listed certain crypto tokens “illegally,” without providing further details and citing an unnamed source familiar with the matter.

• A South Korean court is to hold the first trial for Bithumb’s de-facto owner Kang Jong-hyun on Wednesday, according to local news agency News1. Kang and two other executives of Bithumb-affiliated firms are facing charges of embezzlement, fraudulent transactions and breach of duty. The three have admitted the charges, according to local news media Donga Ilbo.

• Kang’s younger sister Kang Ji-yeon, who heads a number of companies that together hold the largest stake in Bithumb, is also accused of manipulating Bithumb’s share price with false information. In a statement uploaded to Bithumb-affiliated Bucket Studio’s website that has since been removed, Kang Ji-yeon said the allegations against her brother are “unverified and one-sided.”

• South Korea is developing a regulatory framework for the country’s digital asset industry, which is expected to include clearer guidelines for listing and delisting crypto tokens on exchanges.

See related article: More bad news for South Korea’s Bithumb exchange with allegations of ‘Kimchi coin’ manipulation