by Rubab Fatima
South Korean prosecutors conducted a search at Bithumb to examine misconduct charges against the previous CEO during their active probe. Law enforcement officials carried out a March 20 raid through Seoul Southern District Prosecutors’ Office to examine if Kim Dae-sik stole funds from Bithumb to buy real estate.
Official sources believe Bithumb allocated 3 billion Korean won lease money (about $2 million) for an apartment that belongs to Kim who serves as an adviser to the company. The investigation team wants to determine if Kim Dae-sik used money from the exchange to acquire personal property because this behavior suggests leadership embezzlement.
Bithumb Acknowledges Certain Allegations Amid Investigation
According to YTN South Korea’s Financial Supervisory Service (FSS) checked this case previously and sent its results to local prosecutors for investigation. The FSS found problems in how the money was managed which led to more investigation by law enforcement agencies.
According to a Chosun Daily interview the Bithumb representative explained that certain claims against the operation were valid. The exchange said that right after the FSS investigation Kim borrowed private money which he used to buy his apartment then fully paid back the lender. Legal authorities continue to investigate if payments fully resolve the case even though evidence suggests Kim received loans for his home.
Reports have scrutinized Bithumb for possible bad business listing procedures. Wu Blockchain revealed through confidential sources that two crypto startups paid $2 million and $10 million to Bithumb and Upbit for their token listings. Evidence shows these deals were connected to key Upbit management figures who worked as market makers and owners.
A published report stated that projects needed to pay between 3% and 5% of their token supply to appointed mediators. Upbit rejected these charges and asked Wu Blockchain to provide proof of which projects were involved and where the evidence came from. The exchange demanded more information about brokerages running through connections between designated parties.
Regulatory and Legal Hurdles Delay Bithumb’s Market Debut
The investigation occurs as Bithumb begins its long-awaited efforts to take the company public. In his push to list Bithumb publicly Lee Jae-won stepped up efforts with the Business Post covering this march 18. Bithumb takes steps to reorganize internally to protect the organization from possible legal risks due to its major shareholders.
Bithumb experienced previous legal problems before this incident. The former Bithumb board chairman Lee Jeong-hoon experienced fraud charges in 2021. The Supreme Court of South Korea’s decision to clear Lee Jae-won enhanced Bithumb’s determination to make its initial public offering possible by 2025.
The company first announced its IPO plans during 2020 but needed to face multiple legal and regulatory hurdles until it could proceed to market debut. In 2023 Bithumb selected an underwriter to start its stock market listing as part of its revival strategy.
During 2024 the exchange reorganized its business to help it enter the market faster. The company announced its steps forward despite taking a loss of 57% during fiscal year 2023 which created more challenges for its initial public offering plans.
Legal actions against Bithumb influence its potential initial public offering and how investors see the exchange in the crypto industry. South Korea leads cryptocurrency markets around the world so the results from this investigation will guide future government rules for digital asset platforms within the nation.
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