Bithumb ex-chair Lee Jung-hoon faces 8-year imprisonment for alleged $70M crypto scam

Lee Jung-hoon, Bithumb exchange's former chairman, is facing an 8-year imprisonment for being accused of scamming the company of $70 million.

Lee Jung-hoon, the former chairman of cryptocurrency trading platform Bithumb, is facing an eight-year imprisonment after being accused of scamming Kim Byung Gun, the chairman of Singapore-based BK Group, of $70 million.

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Yonhap, a local news source, reported that Lee got Kim to issue Bithumb Coin (BXA) through the BK Group on the condition that BXA would be listed on Bithumb. Kim bought his stake in Bithumb using around $25 million of the BXA presale funds. The token was also sold to multiple other investors, generating a total revenue of almost $45 million. Nevertheless, BXA was not included on Bithumb’s platform. 

In accordance with South Korea’s Act on the Aggravated Punishment of Specific Economic Crimes, the prosecution is demanding a fraud conviction for Lee. The hearing to determine Lee’s sentence is set for December 20.

During a hearing prosecutors said “the amount of damage is very large, and the damage is especially great for ordinary coin investors.” 

In response to Kim’s allegations, Lee’s attorney said that BK Group’s Kim filed a lawsuit against Lee to avoid being held legally accountable for his role in the BXA token sale’s total failure. The lawyer says “The structure of this case is a typical stock sale contract. The negotiation took place for 90 days”. But the investigation team in South Korea reached the conclusion that with the other investors in the BXA token sale Kim also suffered.

Lee expressed regret for putting Bithumb in trouble

Amid the turmoil, Lee expressed his regret stating: “Bithumb was the number one exchange in Korea at the time of sale. I am very sorry for making it difficult for employees and causing social pressure.”

In light of recent events, it is unclear if Sam Bankman-Fried exchange FTX will move forward with the July-announced acquisition plans to acquire Bithumb as part of its expansion strategy amid the continuing crypto winter.

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