South Korea’s Bithumb Cryptocurrency Exchange Raided and Seized by Authorities

Ritika Sharma
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.
  • The raid was conducted on 2nd September by the Seoul Metropolitan Police Agency in Bithumb’s office in the Gangnam district. Lee Jung-hoon.
  • It has been reported that the investors had suffered a loss of $25 million.
  • Bithumb exchange apparently has the largest trading volumes in entire Korea. The average number of visitors from May to July stood at 4.11 million. 

Bithumb the largest cryptocurrency exchange in South Korea has been raided and seized by South Korean authorities. As reported by Korean media agencies, the raid was conducted on 2nd September by the Seoul Metropolitan Police Agency in Bithumb’s office in the Gangnam district. Lee Jung-hoon, the chairman of the board of directors of Bithumb Holdings and Bithumb Korea, the chairman of the board of directors of Bithumb Holdings and Bithumb Korea is currently under investigations and has been charged for economic frauds, violation of laws and for the escape of property abroad. Bithumb exchange apparently has the largest trading volumes in entire Korea. The average number of visitors from May to July stood at 4.11 million. 

Accused for Economic Frauds Involving BXA Token

The exchange seized because according to investigations it was found that they were involved in an economic fraud with the token BXA. It has been reported that the investors had suffered a loss of $25 million. It was found that the BXA token was promoted as Bithumb’s own cryptocurrency token which later was involved in a big scale fraud imposing damages on the investors. The victims of this fraud claimed that the exchange pre-sold BXA tokens worth 30 billion won for its token listing in the exchange. However in reality the token was never listed in Bithumb. 

Coinbit was Also Raided by Korean Police a Week ago

Apart from the largest cryptocurrency exchange in South Korea, the authority previously raided the third largest cryptocurrency in Korea, Coinbit. Last week, the Korean police also raided its office in the Gangnam district. The exchange was found guilty for faking their trade volumes by creating ghost accounts to inflate the volumes. This is known as wash trading. In the process the exchange generated an income of $85 million or 100 billion wons by the means of market manipulation. 

Bithumb Planning to Hold a IPO this Year

As mentioned above Bithumb is the largest cryptocurrency exchange in South Korea and the 9th largest in the world. Moreover, back in June, the exchange was planning to hold an initial public offering later this year. Previously, Bithumb planned to go public in 2019 when a Singapore based Blockchain Exchange Alliance which controlled the stakes of the exchange that time was planning to list in the United States through a reverse merger. However, the plans never got executed and were dropped later. The seizure didn’t seem to have much effect on the exchange as it was quite active at the time of writing.

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