The alleged true owner of Bithumb, the largest cryptocurrency exchange in South Korea, has been arrested on the grounds of embezzlement on February 2.
According to the prosecution, they arrested Kang and a person listed only as Cho on the allegations. According to the local news source JTBC, another person, identified only as Cho, has admitted guilt on all counts.
According to the local news source Newsis, prosecutors believe Kang Jong-hyun is the owner of Bithumb and its affiliates and that his sister and brother conspired to steal corporate funds and manipulate stock prices.
Bithumb affiliated companies saga
Kang Ji-yeon, the younger sister of Kang, serves as the chief executive officer of the Bithumb-affiliated businesses Inbiogen and Bucket Studio. The major shareholder of Bithumb and Vidente, a video equipment maker, is the biotechnology company Inbiogen. The majority owner of Inbiogen is the distributor of entertainment content Bucket Studio.
Kang was prohibited from leaving the country after the three Bithumb affiliates were raided by prosecutors last October. Last month, the authorities summoned both his siblings and opened an investigation.
The CEO of Bucket Studio, Kang Ji-yeon, apologized to the company’s shareholders and claimed that the allegations against his brother were “unconfirmed,” adding that he would assist the authorities in their investigations.
“The allegations surrounding my brother Kang Jong-hyun are unconfirmed and one-sided … I can confidently say that there are no problems related to embezzlement or breach of trust within the company,”
The largest cryptocurrency exchange in South Korea is the subject of an inquiry by the South Korean National Tax Service agency. According to reports, investigators searched Bithumb’s headquarters in Seoul as part of the continuing tax investigation.
The story gets even more complicated because Park Mo, the largest shareholder in Bithumb, was discovered dead in front of his house in late December.
He was also subject to an investigation amid allegations of embezzlement and market manipulation It was believed that Park Mo committed suicide due to the accusations made against him.