South Korean prosecutors raided crypto exchange Bithumb following suspicions that its former CEO embezzled funds to purchase an apartment.
On March 20, Seoul’s Southern District Prosecutors Office reportedly searched Bithumbs offices in the country.
The investigation centered around allegations that the crypto exchange gave a 3 billion Korean won (over $2 million) apartment lease deposit to Kim Dae-sik, its former CEO and board member, who now works as an adviser to the firm.
Prosecutors raised concerns over potential financial misconduct within the company, suspecting that Kim used some of the funds to purchase a personal apartment.
Bithumb says its former CEO repaid the funds
Local media outlet YTN reported that the country’s Financial Supervisory Service (FSS) had previously investigated the suspicions and handed their findings to the prosecutor’s office.
In an interview with The Chosun Daily, a Bithumb representative said some of the allegations are true.
The exchange said the executive took a loan from a lender immediately after the FSS investigation. After this, Bithumb said Kim repaid the funds spent on the apartment purchase in full.
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Bithumb faces probe amid IPO push
The investigation comes as the crypto exchange attempts another push to go public. On March 18, the Business Post reported that Bithumb CEO Lee Jae-won is expediting the process of the company’s long-awaited initial public offering (IPO).
The report said the company has reorganized to eliminate judicial risks on major shareholders.
In 2021, Bithumb’s former board of directors chairman, Lee Jeong-hoon, was indicted on alleged fraud charges. As South Korea’s Supreme Court acquitted the Bithumb executive, the exchange is expected to speed up its IPO in 2025.
Bithumb’s IPO plans date back to 2020 when local media reported that the exchange platform had been preparing for a stock market launch.
However, the company faced obstacles that prevented it from successfully conducting an IPO. In 2023, the company chose an underwriter for its IPO plans, reigniting the chatter it’s working on conducting an IPO.
In 2024, the rumors were confirmed as Bithumb Korea set up a non-exchange business to accelerate its debut on the stock market. However, the news was paired with a 57% loss in annual revenue for the exchange operator in the fiscal year 2023.
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