EX Bithumb Chairman Has Been Cleared of Fraud Charges
- Prosecutors reportedly looked into the affairs of the Bithumb exchange due to its close ties with the collapsed Terra ecosystem.
- A South Korean court ruled that the claims against Jung-Hoon lacked credibility.
- Jung-Hoon’s acquittal comes days after Park Mo, vice president of Vidente, Bithumb’s largest shareholder, committed suicide.
According to local reports, the former chairman of the South Korean exchange, Bithumb, Lee Jung-Hoon, has been cleared of any wrongdoing and declared not guilty of fraud by the 34th Division of the Criminal Agreement of the Seoul Central District Court.
Jung-Hoon was accused of violating the Act on the Aggravated Punishment of Specific Economic Crimes due to fraud in 2018. He was said to have cheated Kim Byung-gun, chairman of BK Group, during negotiations for the acquisition of Bithumb.
The former Bithumb chairman was accused of embezzling the acquisition deposit and could have received an eight-year sentence if found guilty of fraud. Jung-Hoon accepted an upfront “contract fee” of $70 million on the claim that Bithumb would list a native coin, Bithumb Coin (BXA) and use funds from the token sale to pay for the acquisition. However, the acquisition failed since the token was never listed.
The court ruled that Kim’s charges against Jung-Hoon were not credible since the statements of the victims, including Chairman Kim, were disputed. The court also rejected the prosecution’s claims that Jung-Hoon’s proposal to take over Bithumb and share management with Chairman Kim was a deceptive act since the listing was not recognized. According to the judge,
Even if the defendant’s remarks are interpreted as being able to cover the price of stock trading by listing coins, considering that the victim’s experience in virtual currency and related knowledge are considerable, it is unlikely that the victim will be mistaken after hearing the defendant’s words.
Reacting to the ruling, Bithumb said,
We respect the court’s ruling. Bithumb is operated under a professional management system, and former chairman Lee Jeong-Hoon is not involved in Bithumb’s management at all. Regardless of the outcome of the trial, Bithumb will continue to strive to provide the best service for more convenient and safe transactions.
Jung-Hoon’s acquittal comes days after Park Mo, vice president of Vidente, Bithumb’s largest shareholder, committed suicide. Mo was under investigation for manipulating stock prices and embezzling funds. Since Terra’s demise last year, South Korean prosecutors have increased their scrutiny of crypto firms.
This would not be Jung-Hoon’s first brush with the law. The former Bithumb chairman avoided a court summons last October, citing a mental health challenge. Prosecutors also investigated Bithumb’s ties with Terra Luna.
South Korean regulators also implemented changes to how tokens are listed in the country to avoid a repeat of the Terra situation. Local exchanges are now required to list tokens adhering to national laws.