Best crypto insights delivered straight to your inbox.
- Bithumb CEO Lee Jae-won has formally been named as a suspect in a bribery probe involving the preferential hire of a South Korean Lawmaker’s son.
- The case adds to a list of issues, such as a $24.5 million regulatory fine, a six-month partial business suspension, and a $40 billion Bitcoin distribution error.
- It also raises more alarms about the regulatory issues in South Korea’s crypto industry, where several top executives have faced several criminal charges.
The South Korean police have formally named Bithumb CEO Lee Jae-won as a suspect in their ongoing bribery investigation, mentioning that the CEO hired the son of an independent lawmaker as a political favor.
The development is part of a series of charges and fines aimed at the exchange, leaving it managing one crisis after the other since the beginning of 2026.
As a show of trust, the board is expected to reappoint Lee to a new two-year term, betting on continuity over change. That, however, looks less likely now that he has been made a suspect.
What did the Seoul police say about Bithumb’s CEO?
The Seoul Metropolitan Police Agency’s Public Crime Investigation Unit announced that it has begun investigating Bithumb CEO Lee Jae-won today. They believe that the CEO exercised his power unlawfully by giving the son of an independent lawmaker a job at Bithumb after a meeting held at a restaurant in Seoul’s Mapo district back in November.
The information was leaked by a former aide who worked for Kim, and led the police to believe that the decision was made within two months after the meeting between the two parties.
This then led the police to believe that the hiring was linked to Kim being a member of the National Assembly’s Political Affairs Committee, which oversees the Financial Services Commission in South Korea.
The police also believe that Kim made use of his committee seat to challenge Dunamu, who is in charge of the rival exchange Upbit. Additionally, there was also a former staff member who was hired in September 2025 as an advisor who investigators think might be connected to the current issue.
How does this connect to Bithumb’s other issues?
This new case joins the list of cases stacked against the exchange this year. In March, the South Korean Financial Intelligence unit issued a six-month partial suspension and a fine of $24.2 million after failing to meet anti-money laundering requirements. Bithumb appealed the suspension and got it temporarily blocked, but it’s still not lifted.
Before that though, in February, an error made by a staff member led to around 620,000 Bitcoins being accidentally sent to users.
While Bithumb claims to have found out and addressed the issue within 35 minutes, the incident raised bigger concerns about how the exchange manages its internal systems. This led to regulators introducing stricter checks for all South Korean crypto platforms.
Why is South Korea’s crypto industry facing legal issues?
Holding an executive position in South Korea’s crypto space seems like an extreme sport at the moment. The Bithumb CEO before Lee was convicted for taking bribes to list certain projects and was jailed for two years following investigations.
Upbit CEO Lee Sirgoo left his role in 2025 after the exchange was reprimanded over its own anti-money laundering failure.
A major reason Lee has been able to stay this long at Bithumb is due to a gap in South Korea’s law, which does not recognize crypto exchanges as financial institutions and, as such, does not require the CEO to step down after regulatory issues.
This gap looks to be covered soon as South Korea tightens its crypto industry rules and regulations.
If you're reading this, you’re already ahead. Stay there with our newsletter.
FAQs
What is Bithumb's CEO accused of?
Seoul police suspect Lee Jae-won of offering a bribe by hiring the second son of National Assembly member Kim Byung-ki at the lawmaker's request. Investigators allege Kim then used his position on the committee overseeing financial regulation to target Bithumb's rival Dunamu.
What other legal problems does Bithumb face?
South Korea's Financial Intelligence Unit imposed a $24.5 million fine and a six-month partial business suspension in March for anti-money laundering and KYC violations, and regulators are separately investigating a February incident in which an employee accidentally credited users with 620,000 Bitcoin instead of 620,000 won.
Have other South Korean crypto exchange CEOs faced similar consequences?
Yes. Bithumb Holdings' former CEO Lee Sang-jun was convicted and sentenced to prison for taking payment in exchange for listing cryptocurrencies. Upbit operator Dunamu's former CEO Lee Sirgoo stepped down in 2025 after receiving a regulatory reprimand for AML violations.
Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Hannah Collymore
Hannah is a writer and editor with nearly a decade of blog writing and event reporting experience in the crypto space. At Cryptopolitan, Hannah contributes to the news page, reporting and analyzing the latest developments in DeFi, RWA, crypto regulation, AI and frontier tech industries. She graduated from Arcadia university with a degree in Business Administration.
CRASH COURSE
- Which cryptocurrencies can make you money
- How to boost your security with a wallet (and which ones are actually worth using)
- Little-known investment strategies that the pros use
- How to get started investing in crypto (which exchanges to use, the best crypto to buy etc)