Actual Owner Of Bithumb Arrested For Embezzlement Of Company Assets

Key Points:

• The actual owner of Bithumb has been arrested for embezzlement at the company’s affiliates.
• After interrogation, a request for arrest was issued because there were grounds for concern about absconding and destruction of evidence.
• A total of three people involved have been arrested.

On February 2, the Minister in charge of the arrest warrant of the Seoul Southern District Court, South Korea, arrested Kang Jong-hyun, who is believed to be the actual owner of Bithumb, the cryptocurrency exchange of Bithumb, citing suspicions of corruption and manipulation of stock prices, according to Yonhap News Agency.

Kwon Ki-man, the judge in charge of subpoenas at the Seoul Southern District Court, issued the warrant after questioning the suspect (reviewing the subpoena) before Kang’s arrest the day before, saying, “There was an incident fear of running away and destroying evidence.”

Mr. Jo, the CEO of an unlisted branch of Bithumb, considered an aide to Kang, was also arrested.

The arrest warrant for another Mr. Jo, who was in charge of accounting-related affairs under Mr. Kang’s direction, has been rescinded. He is said to have confessed to all orders.

Previously, on January 25, the Financial Investigation Division 2 of the Seoul Southern District Prosecutor’s Office requested arrest warrants for 3 people, including Kang, on charges of breach of trust and embezzlement under the Severe Penalties Act for Specific Economic Crimes and fraudulent transactions that are illegal under the Capital Markets Act.

According to the prosecution, Mr. Kang and others are suspected of stealing company funds from Bithumb affiliates such as Vident, Inbiogen, and Bucket Studio and taking unfair advantage by manipulating stock prices and issuing convertible bonds.

Mr. Kang’s younger sister Kang Ji-yeon (39), CEO of Inbiogen and Bucket Studio, was also summoned twice last month by prosecutors for questioning. Kang Ji-yeon also appeared at the prosecution once.

The prosecution grasped the circumstances in which the two brothers conspired to steal company money or manipulate the stock price and launched a comprehensive investigation last October, including forfeiture and searched Bithumb affiliates such as Vident, Inbiogen, and Bucket Studio.

Vidente is the sole largest shareholder with a 34.2% stake in Bithumb Holdings (a significant shareholder of Bithumb Korea, the company that operates Bithumb). Vident’s largest shareholder is Inbiogen, and Inbiogen’s largest shareholder is Bucket Studio.

Reportedly, Kang Ji-yeon bought Vident, Inbiogen, and Bucket Studio for 23 billion won in 2020. Vident and Bucket Studio are listed on KOSDAQ, and Inbiogen is listed on KOSPI. He was previously the chief executive officer of Bithumb Holdings and resigned last year.

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