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Lee charged for duping investors by Seoul Police

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Lee Jung Hoo has been charged for duping his investors and had also conned Kim Byung Gun for $100 million. Lee is the former Chairman of Bithumb Holdings. He took the money from him as an upfront contract fee in acquisition negotiations. 

Lee Jung Hoo, the former Chairman of Bithumb Holdings, which is the parent company of Bithumb Korea that operates Bithumb’s crypto exchange, has been charged for duping people by the South Korean Prosecutors. They indicted Lee on Tuesday but did not take him into custody. 

Lee has to see Seoul’s Central District Prosecutors’ Office. As per the report by the prosecutors, Lee allegedly had to con $100 million from Kim Byung Gun, Chairman of BK Group and founder of a line of cosmetic surgery clinics. He was conned by Lee in a deal to negotiate Kim’s acquisition of Bithumb Holdings. 

Conning the partner 

He had asked Kim upfront $100 million as a contract fee from Kim, as per the report filed by the prosecutors. In return, Lee gave assurance that he would list the BXA token on Bithumb’s crypto exchange. It was issued by the Blockchain Exchange Alliance formed by Kim and a consortium affiliated with BK Group in December 2018. 

Kim owned the Singapore-based BK Group. The company is a part of a cosmetic surgery clinic in Seoul. BK stands for Beauty Korea. Lee played a very dubious role here and had said to Kim that he would pay the remaining acquisition costs using money made via BXA token listing. He took this step to get a profit from selling BXA tokens on Bithumb. He can then later use that money to pay for the acquisition of Bithumb. He informed us that he was ready to pay $400million for a 50% stake in Bithumb Holdings. 

The BXA token was never listed on Bithumb. He never had the intentions of listing BXA tokens on Bithumb and that the promise to list the tokens was merely a ploy to get quick cash from Kim and defraud investors. 

Investors Suing Lee and Kim

Lee finally got 8 million won ($7million) for the BXA project. He received the money from more than 50 investors. 30 billion won ($26.4 million) were sold by Lee. He sold BXA tokens on the assurance that tokens would be listed on Bithumb. 

The investors sued both Lee and Kim for fraud in March 2020. However, the charges against Kim were dropped. They were also sued by the investors of the pre-sold BXA tokens in April, but charges against Kim were dropped. 

As per the investigation by the police, Kim was also the victim of the fraud done by Lee. The prosecutors informed that they would not take Lee into custody because he had cooperated in all the investigations and had forfeited 70% of the aforementioned $100 million to the state. 

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