South Korean Prosecutors Raid Bithumb HQ Over Fund Misuse Allegations

South Korean prosecutors have launched an investigation into Bithumb over allegations that company funds were misused to purchase an apartment for its former CEO.

The Seoul Southern District Prosecutors’ Office conducted a search and seizure operation on March 20 at the company’s headquarters in Yeoksam-dong, Seoul.

The Alleged Purchase

According to local media reports, Bithumb provided 3 billion won ($2.2 million) worth of company funds to Kim Dae-sik, the company’s former CEO and current advisor.

Authorities suspect that part of the money was used to pay the deposit on an apartment leased under Kim’s name in Seongsu-dong, Seoul. Further, it is alleged that the deposit’s value increased by millions of won in 2023, with the additional funds used for personal purposes.

The Financial Supervisory Service (FSS) has been investigating the matter and recently handed the case over to the prosecution.

In an interview with The Chosun Daily, a Bithumb representative acknowledged that some of the claims were true. The person told the media outlet that Kim took a loan from a lender shortly after the FSS investigation and repaid the full amount used for the apartment purchase.

Bithumb’s History of Legal Scrutiny

It is not the first time Bithumb has faced legal scrutiny. In 2023, the firm was raided alongside Upbit in an investigation into South Korean lawmaker Kim Nam-kuk, who was found to have held roughly $4.5 million worth of Wemix coins on both platforms.

Kim was accused of trading crypto during parliamentary sessions and had previously voted in favor of various crypto regulations.

Earlier in January of the same year, authorities raided the exchange’s offices following allegations that one of its employees had manipulated the price of BXA (Bithumb Coin) listed on the platform.

The incident occurred shortly after prosecutors sought an arrest warrant for Kang Jong-hyun, the suspected de-facto owner of Bithumb, on charges of embezzlement and market manipulation. The 43-year-old was accused of directly receiving bribes and misusing approximately $49 million in company funds.

The bribery and market manipulation scheme also involved Bithumb’s former CEO, Lee Sang-jun, and professional golfer Ahn Sung-hyun. The former was accused of manipulating stock prices and accepting bribes to favor certain tokens on the platform, while the latter facilitated the transactions.

On December 26, 2024, Lee was sentenced to two years in prison, Ahn received a four-and-a-half-year term, and Kang was sentenced to one and a half years.