Home bithumb Seoul Police Raids Cryptocurrency Exchange Bithumb's Office Again for Fraud Related Investigations

Seoul Police Raids Cryptocurrency Exchange Bithumb’s Office Again for Fraud Related Investigations

  • South Korean officials have seized Bithumb for the second time since September 2
  • Bithumb’s BXA token investors accused the company of fraud last year
  • Bithumb is one of South Korea’s biggest cryptocurrency exchanges by trading volume

According to local reports published on September 7, the police further seized and searched ‘Bithumb’ on account of investigation following accusations of fraud.  The Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit has been seizing and searching two locations, including the offices of Bithumb headquarters in Gangnam-gu, Seoul, from around 11 am on September 7. It has been 5 days since the leading crypto exchange’s headquarter office was seized and searched on September 2.

Police officials explained that the search was underway to secure additional evidence related to the allegations raised.

On September 2, the police began an investigation on Bithumb, one of the leading cryptocurrency exchanges in South Korea, in its Gangnam based office. The average number of visitors on Bithumb from May to July was 4.11 million, notably the largest in Korea.

Bithumb uses resources and technology to provide a range of services and solutions about crypto assets, including digital asset exchange, digital asset issuance, Blockchain project incubation, and decentralized financing services.

Seoul metropolitan government authorities have shared that the search for confiscation is linked to allegations of investment fraud linked to the issuance of BXA token. This cryptocurrency was allegedly endorsed as Bithumb’s native token but turned out to be just another crypto scam that caused investors losses worth approximately $25 million.

BXA token investors sued the police for fraud and embezzlement against Lee Jung-hoon, chairman of the board of directors, Bithumb Holdings and Bithumb Korea, and BK Group Chairman Kim Byung-gun. BXA token’s value had declined, and failure to list the token meant that they have been left with practically no resources to show for their investment, despite a number of grand promises.

The Seoul Metropolitan Government’s Intelligent Crime Investigation Department took over the case to the Seoul Suseo Police Station in July and has been probing the matter since then.

In early September 2020, verdict from the Seoul Central District Court reportedly ruled that Bithumb was ‘partially responsible’ for a data breach incident which took place in 2017.

Going by recent events in South Korea, it seems like Bithumb is not the only culprit in the country’s crypto space. Recently, police also seized Coinbit – the country’s third-largest exchange – on allegations it had faked most of its trading volumes.

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Piyasi Mitra
Piyasi Mitra is a journalist, features writer and copy editor who has worked with The Times of India and the ABP Group, and is currently exploring content creation in the digital space.

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