The Seoul Metropolitan Police Agency has reportedly raided and seized Bithumb, South Korea’s largest cryptocurrency exchange, over some allegations of fraud.
Reported by the local newspaper Seoul Shinmun today, the local police have seized the physical premises of the exchange located in Gangnam district.
The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation
The exchange allegedly committed fraud involving around about 30 billion won ($25 million) in BXA tokens, the native digital token of the crypto exchange. It allegedly sold these tokens ahead of its possible acquisition by Singapore-based BK Group, but the deal did not go through.
The investors in these tokens faced losses as the South Korean exchange and did not list them on its platform for trading. A media outlet earlier pointed out that a few investors participating in the sale even lost millions of dollars.
Lee Jung-hoon, chairman of Bithumb, has also been accused of fraud and illegally sending funds into overseas accounts.
Police’s Keen Eye on Crypto Operations
This is the second such police raid on a top South Korean digital currency exchange as, last week, the offices of Coinbit were seized for its involvement in massive wash trading. The exchange was accused of inflating around 99 percent of its trading volumes, gaining $85 million from that.
Despite Bithumb’s popularity in the country as a crypto exchange, it had trouble with the authorities. Last year, the country’s tax department slapped a $69 million bill as it had withheld taxes for which the exchange went to court.
Moreover, the exchange is now reportedly considering to go public. Notably, the exchange also reported a profit of $30.5 million in 2019, after grave losses in the previous year.