Ex-Bithumb Chief Acquitted of Fraud Charges in Surprise Verdict

• South Korean prosecutors have failed to convict the former head of the crypto exchange Bithumb, Lee Jung-hoon, of fraud charges.
• The accusations dated back to October 2018 and involved a failed deal to sell the exchange to Kim Byung-gun of the plastic surgery firm BK Group.
• The Seoul Central District Court acquitted Lee of all charges, though prosecutors are expected to attempt to overturn the verdict in a second trial.

South Korean prosecutors have been thwarted in their efforts to send the former head of the crypto exchange Bithumb, Lee Jung-hoon, to prison for eight years. In a surprising twist, the Seoul Central District Court acquitted Lee of all charges on fraud related legal violations worth some $70 million.

The case dates back to October 2018 when Lee and Kim Byung-gun, the chairman and founder of the plastic surgery firm BK Group, were in the process of negotiating a deal to sell the exchange to Kim. However, the deal fell apart over payment-related issues in 2019, and the two parties have been embroiled in disputes ever since.

At the heart of the disputes is BXA, an altcoin created by the Singapore-based BK Group. Various parties have alleged that part of the deal included an agreement to list the altcoin on Bithumb, a move that would likely have caused a price rise. As a result, prosecutors had accused Lee of fraud-related legal violations worth some $70 million and sought to jail him for eight years.

The prosecution had claimed that the money had been disguised as a down payment but had in fact been embezzled by Lee. However, the District Court found him innocent of this charge. Despite this, prosecutors are expected to attempt to overturn the verdict in a second trial, likely at the high court.

Bithumb released a statement that Lee is its “former chairman” and currently plays no part in the exchange’s management or operations. The complicated ownership structure of Bithumb has been an ongoing issue for several years, and the platform has been seeking a buyer for some time. It is unclear how many shares are owned by Lee, and a reclusive millionaire named Kang Jong-hyun, adding to the confusion.

Ultimately, South Korean prosecutors have failed in their bid to imprison Lee Jung-hoon, but the complicated legal disputes between the parties are still ongoing. It remains to be seen whether the verdict will stand, and whether the ownership structure of Bithumb will ever be resolved.