South Korean prosecutors raided the headquarters of crypto trade Bithumb on March 19 as a part of an investigation into whether or not the corporate’s former CEO misused company funds to buy an house, in accordance with native media experiences.
Authorities from the Seoul Southern District Prosecutors’ Workplace searched Bithumb’s Yeoksam-dong workplaces, wanting into claims that the trade offered a 3 billion received ($2.3 million) lease deposit to its former CEO and present advisor, Kim Dae-sik.
Investigators suspect that Kim used a portion of those funds to accumulate a private residence in Seoul’s Seongsu-dong district.
The timing of the investigation raises contemporary considerations for Bithumb, which has been working towards a long-awaited preliminary public providing (IPO).
CEO Lee Jae-won not too long ago reaffirmed the corporate’s intent to listing on the inventory market in 2025 and has made structural modifications to reduce authorized dangers tied to key shareholders.
Funds repaid
The Monetary Supervisory Service (FSS), South Korea’s monetary regulator, beforehand examined the case earlier than transferring it to prosecutors.
Following the investigation, a Bithumb spokesperson acknowledged in an interview with The Chosun Each day that Kim had taken a mortgage from an exterior lender after the FSS investigation and later repaid the funds.
Regardless of the reimbursement, prosecutors are reviewing whether or not the unique transaction violated monetary rules or company governance guidelines. The case has intensified scrutiny over Bithumb’s inside monetary administration as authorities proceed to watch the nation’s crypto sector for potential misconduct.
It has additionally raised considerations about broader governance and monetary practices inside the trade, which has confronted repeated authorized and regulatory scrutiny lately.
Itemizing allegations
The raid comes amid separate allegations that Bithumb and rival trade Upbit facilitated token listings by way of intermediaries who allegedly charged initiatives hefty charges.
Researcher Wu Blockchain reported that some initiatives paid between $2 million and $10 million to safe listings on the exchanges. The allegations additionally recommend that sure intermediaries had ties to Upbit shareholders and market makers, with charges starting from 3% to five% of token provides.
Upbit has denied the claims and demanded that Wu Blockchain present a listing of initiatives that allegedly paid brokerage charges, calling for proof to assist the accusations.
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