Bithumb Founder Could Face 8 Years in Prison Over $70M Fraud

25 October 2022, 18:00 GMT+0000
Updated by Geraint Price
25 October 2022, 18:00 GMT+0000
In Brief
  • The founder of Bithumb is facing a potentially significant prison sentence over allegations of fraud.
  • Lee Jung-hoon received $70 million payment upfront, but never honored the terms of the deal.
  • For a considerable time, the founder has attempted to avoid questions on the matter.
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The founder of Bithumb crypto exchange is facing a potential eight-year prison sentence over allegations of a $70 million fraud.

Founder Lee Jung-hoon faced trial on Tuesday with the verdict expected in late Dec, according to the Yonhap News Agency. Should the Bithumb man be found guilty he faces a maximum sentence of up to eight years.

Bithumb Fraud Led to Investor Losses

According to prosecutors, Lee stole $70 million from Kim Byung Gun. Kim made his fortune as the chairman of the cosmetic surgery empire BK Group, but sought to broaden his business interests by purchasing a stake in the South Korean exchange.

Kim paid a $70 million fee upfront to Lee on the understanding that he would proceed to list a BXA token to put the deal in motion. Despite Lee receiving the money from Kim the token listing never proceeded as promised.

Kim was not the only party damaged by this. Ordinary investors who expected the BXA token to float on Bithumb also lost out on the aborted deal.

This resulted in a legal case against both parties, but Kim evaded any sanction from the authorities due to being deceived by Lee during the negotiation. 

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A Very Sick Man

For some time Lee Jung-hoon and his associates have attempted to evade all justice and scrutiny citing health issues.

On Tuesday Rep. Min Byung-duk summarised the behavior of the executive when detailed the lengths Lee Jung-hoon had gone to.

“The former Bithumb chairman submitted a written statement for his absence once again, even if he exudes enormous influence on the exchange as a major shareholder,” he said as reported by Korea Times. “He [Lee] cited health reasons and ongoing lawsuits, but he is scheduled to attend a trial the following day.”

Min continued, “The medical certificate he sent us shows that he needs to receive drug treatment for more than three months, but the diagnosis date was 19 months ago. I request the Assembly to proceed with bringing criminal charges against him for his shameless behavior (by not attending the audit).”

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.