Kang Jong-Hyun, the ex-chairman of South Korea’s largest cryptocurrency exchange, Bithumb, has been arrested on suspicion of embezzlement, breach of trust, and fraudulent activities.
According to reports, Kang Jong-Hyun was detained on February 2 in connection with the allegations. The Seoul Southern District Court issued a warrant for his arrest on January 25, which included charges of neglect of duty, market manipulation, and fraudulent transactions.
Prosecutors allege that the siblings conspired to embezzle company funds and manipulate the stock prices of Inbiogen and Bucket Studio by issuing convertible bonds.
South Korean authorities had requested the arrest of Jong-Hyun and two other executives last month, including his younger sister Kang Ji-Yeon, the CEO of two publicly traded Bithumb affiliates, Inbiogen and Bucket Studio.
Last Thursday, Bithumb offices were searched as part of an inquiry into the price manipulation of a coin traded on the South Korean cryptocurrency exchange.
According to the prosecution, the search and seizure were unrelated to Bithumb and were done to protect a specific coin’s transaction data that they intended to examine.
The South Korean National Tax Service agency began looking into the Bithumb exchange on January 10. According to reports, investigators searched Bithumb’s headquarters in Seoul as part of the ongoing tax investigation.
Park Mo, the biggest shareholder in Bithumb, was found dead in front of his own house in December 2022 and was also being investigated for suspected embezzlement and market manipulation.
Separate from the tax evasion investigation, the probe into Jong-Hyun and the other executives’ conduct is focused on claims that they colluded to embezzle business funds and influence stock prices.
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