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The person alleged to be the real owner of South Korea’s largest cryptocurrency exchange Bithumb was arrested on February 2 local time on suspicion of embezzlement.
According to local media reports, Kang Jonghyun was arrested on suspicion of embezzlement. The Seoul Southern District Court issued an arrest warrant for the businessman on Jan. 25 on multiple charges, including his dereliction of duty, market manipulation, and fraudulent trading.
The 41-year-old is the older brother of Kang Ji-yeon, president of Bithumb affiliate Inbiogen. The company holds the largest stake in Vidente Vidente, his largest shareholder in Bithumb with a 34.2% stake.
Prosecutors say the brothers embezzled corporate funds and conspired to manipulate the stock prices of InBiogen and video production company Bucket Studios through the issuance of convertible bonds.
In a notice posted on Bucket Studio’s website, CEO Kang Ji-yeon apologized to shareholders, said the allegations against his brother were “unconfirmed,” and added that he would cooperate with the authorities’ investigation.
On January 10, Cointelegraph reported that the South Korean National Tax Service has launched an investigation into South Korea’s largest cryptocurrency exchange. Investigators have reportedly raided Bithumb’s Seoul headquarters as part of an ongoing tax investigation.
Things got even worse when Bithumb’s largest shareholder, Park Mo, was found dead in front of his home in late December.
He was also the subject of an investigation amid allegations of embezzlement and market manipulation. Park Mo is suspected of taking his own life because he was indicted.
Related: Former Bithumb chairman Lee Jong-hoon acquitted
According to CoinGecko, Bithumb has a 24-hour trading volume of $370 million. Founded in 2014, the exchange offers 191 coins and 287 trading pairs, with BTC/KRW being the most popular.
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