South Korean authority arrests Bithumb owner on $50M embezzlement charges

Bithumb exchange owner Kang Jong-hyun has been arrested on suspicion of embezzling about $50 million, according to local news JTBC.

A South Korean-based cryptocurrency exchange executive recently faced fraud charges. For example, former Chairman Lee Jong-hoon was accused of embezzling about $70 million in a transaction with BK Group Chairman Kim Byung-gon.

An investigation into the allegations against Jong-hoon reveals that the little-known Kang Jong-hyun is the owner of the exchange.

South Korean media JTBC reported on the 2nd that the Seoul Southern District Court issued an arrest warrant for Kang Jong Hyun.

Jong-hyun, along with two Bithumb executives, were arrested for fraud, stock manipulation, and embezzlement of corporate funds worth 60 billion won (approximately $50 million).

Further investigation revealed that Jonghyun is the older brother of Kang Jiyoung, the head of Inbiogen, an affiliate holding approximately 34.2% of Bithumb’s shares.

The duo allegedly conspired to manipulate Inbiogen’s share price and embezzled 60bn of corporate funds.

Jonghyun denied the allegations of embezzlement and said it was irrelevant because he no longer had a relationship with the company.

Kang Ji-young added that the allegations against her brother were “unconfirmed.” However, he was willing to cooperate with the authorities’ investigation.

Meanwhile, South Korea’s National Tax Service (NTS) said it was investigating Jonghyun and Kang Jiyoung’s tax affairs to uncover potential tax evasion and money laundering.