• South Korean prosecutors have been unsuccessful in their efforts to sentence the former head of the crypto exchange Bithumb to eight years in prison.
• The court acquitted Lee Jung-hoon on fraud charges related to a failed sale of the crypto exchange to the BK Group in October 2018.
• Legal disputes continue between Lee and Kim over the altcoin BXA, which was to be listed on Bithumb and could have caused a price rise.
The crypto exchange Bithumb has been fraught with legal disputes for the past few years, with the most recent involving the former head of the exchange, Lee Jung-hoon. South Korean prosecutors had sought to jail Lee for eight years on fraud-related charges, however, their efforts were thwarted when the Seoul Central District Court acquitted Lee of all charges.
The case dates back to October 2018 when Lee attempted to sell Bithumb to the plastic surgery firm BK Group, which is led by Chairman and Founder Kim Byung-gun. The sale was complicated by the fact that there were disputes over the ownership structure of Bithumb, and who was actually responsible for the sale. The deal eventually fell apart over payment issues in 2019, but not before the two sides had agreed to list the altcoin BXA on Bithumb, which would have likely led to a price increase.
The prosecution accused Lee of fraud-related legal violations worth some $70 million, claiming that the money had been disguised as a down payment but was in fact embezzled by Lee. However, the District Court found him innocent of these charges, and it is expected that prosecutors will attempt to appeal the verdict in a second trial.
Bithumb has publicly stated that Lee is its “former chairman” and he currently plays no part in the exchange’s management or operations. Despite this, the legal wrangling surrounding the exchange’s ownership structure continues. The platform has been seeking a buyer for some time, however, it is unclear how many shares are owned by Lee and reclusive millionaire Kang Jong-hyun.
The failed trial and continued disputes are sure to have a lasting impact on Bithumb and the crypto exchange industry as a whole. While Lee has been cleared of charges, it is yet to be seen how the sale and listing of BXA will progress in the future. Until then, it appears that the legal battle for the exchange will continue for some time.