Bithumb, was seized by the Seoul Metropolitan Police Agency following fraud accusations after multiple suspicious moves.
Bithumb, the bad student
This is not the first time the firm has had legal problems. In January 2018, a search was conducted for tax evasion. In the end, 28 million dollars had to be paid to the state.
There were also numerous hacks, which were considered negligence in terms of security. In June 2017, a massive data leak was perpetrated by a hacker intruding on an employee’s personal computer.
In 2018, $32 million also evaporated during a hack, causing severe dissatisfaction among users.
Finally, on March 28, 2019, the company reported having lost $20 million, mainly in Ripple and EOS, again during a hack.
As if that wasn’t enough, on September 2, 2020, Bithumb put another layer on. According to the report published by the Metropolitan Police Agency, it is now suspected investment fraud.
Users deceived and left to their fate
This time the fraud would exceed $25 million. Indeed, in 2018, the platform sold its native token, the BXA (Blockchain Exchange Alliance), to its investors. However, this token never saw the light of day on the platform.
Thousands of investors found themselves wronged, victims of a dead loss of 25 million dollars. The state agency summoned Lee Jung-Hoon, owner of Bithumb and PCA of Bithum Holdings.
The man is accused of embezzlement, for tax evasion purposes, through offshore investments and through the purchase of properties abroad. According to the South Korean press, another man, Kim Byung-gun, is also charged. However, the police have so far not initiated a search.
According to Cointelegraph, the police have already searched Bithumb’s offices twice, and the case is likely to drag on.
In recent years, finance has shown tremendous creativity when it comes to deceiving states and generating illicit gains. Nevertheless, this strategy is now showing its limits.