Thomas Daniels
As part of an investigation into claims that its former CEO, Kim Dae-sik, embezzled company cash to pay for a personal apartment purchase, South Korean officials raided cryptocurrency exchange Bithumb.
Bithumb is being investigated by prosecutors for alleged financial misconduct.
Bithumb’s premises were searched by Seoul’s Southern District Prosecutors’ Office on March 20 in response to claims that the exchange had given Kim Dae-sik a 3 billion Korean won (about $2 million) leasing deposit. Kim, a former CEO and board member who currently serves as an adviser, is suspected by prosecutors of misappropriating some of these monies for her own benefit.
The probe comes after the Financial Supervisory Service (FSS) of South Korea conducted a previous investigation in which it identified possible financial crimes and sent its findings to prosecutors.
Bithumb Verifies Repayment of Funds
A Bithumb spokesperson responded to the accusations by admitting that some aspects of the case were true. In an interview with The Chosun Daily, the company said that following the FSS investigation, Kim obtained a loan from an outside source and paid it back in full.
In addition to this instance, there have been allegations of projects attempting to get listed on Bithumb paying listing fees. Wu Blockchain claimed in a March 20 article, citing unnamed sources, that two projects allegedly paid $2 million and $10 million, respectively, to be listed on Upbit and Bithumb. The study also implied that people with ties to Upbit’s market makers and stockholders were responsible for facilitating middleman fees, which ranged from 3% to 5% of the total token supply.
Investigations Cast Doubt on Bithumb’s IPO Plans
As it speeds up plans to go public, the most recent examination comes at a crucial time for Bithumb. Bithumb CEO Lee Jae-won is giving the company’s eagerly awaited initial public offering (IPO) first priority, according to a March 18 Business Post article.
The exchange has made structural adjustments to reduce the legal risks associated with its largest stockholders in order to make this transition easier. The Supreme Court of South Korea cleared former Bithumb board chairman Lee Jeong-hoon of fraud accusations in 2021. Following the resolution of this legal issue, industry observers predict that Bithumb will proceed with its plans to go public in 2025.
Although prior financial and legal obstacles postponed its stock market debut, Bithumb’s initial public offering (IPO) plans go back to 2020. The company’s appointment of an underwriter in 2023 indicated a revived interest in going public. To speed up the IPO process even further, Bithumb Korea formed a non-exchange business entity in 2024. As the corporation announced a 57% loss in yearly sales for the fiscal year 2023, this development was accompanied by a steep decline in financial performance.
