July 24, 2024

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Former Bithumb chair faces 8-year imprisonment

2 min read
Former Bithumb chair faces 8-year imprisonment

Lee Jeong-hoon, the former chair of Bithumb, one of South Korea’s major cryptocurrency exchanges, is at the center of a legal battle and might face an eight-year prison sentence, with a verdict scheduled for Jan. 18, 2024.

According to Korean local media reports, prosecutors contend that Lee intended to revamp Bithumb’s governance to gain from exchange tokens, circumventing financial regulations. The case has been ongoing since October 2018, when the former chair allegedly defrauded 100 billion won ($70 million) during negotiations for the acquisition of Bithumb from Kim Byung-gun, chair of the cosmetic surgery company BK Group. Prosecutors claim Lee knew about challenges in the BXA token listing but didn’t disclose it to Kim. Despite listing issues, Lee purportedly received payments without informing Kim about the decision not to list the BXA token.

The South Korean prosecutors requested an eight-year prison sentence for Lee.

Lee’s defense challenges the claims, pointing out discrepancies in Kim’s statements and questioning his reliability. Lee insists on Kim’s competence to lead Bithumb, maintaining that Kim was informed about the progress of the BXA token listing.

Lee faces legal issues related to accusations of violating the Act on Aggravated Punishment for Specified Economic Crimes, particularly fraud.

Related: Bithumb plans to be first crypto exchange listed on Korea stock market: Report

The decision on Lee’s ongoing appeal might set a precedent for legal proceedings involving cryptocurrency exchanges and governance. This development coincides with Bithumb’s preparations for an initial public offering on Kosdaq by 2025.

The appeal’s result will significantly impact Bithumb’s future and the fate of BXA tokens. A guilty verdict might trigger a reassessment of governance frameworks in cryptocurrency exchanges, potentially resulting in increased regulatory scrutiny.

While the cryptocurrency community and investors anticipate the appeal outcome, the case underscores the industry’s dynamic nature and the necessity for well-defined regulatory frameworks to tackle governance issues and uphold trust among investors and stakeholders.

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