South Korean authorities have arrested the former chairman of crypto exchange Bithumb, on charges of embezzlement and market manipulation.
Prosecutors accused Kang Jong-Hyun of conspiring with a business partner to manipulate stock prices and steal 60 billion won ($49 million) from his company, local news outlet JTBC reported.
The Seoul Southern District Prosecutor’s Office had sought the arrest of Kang and two executives, including his younger sister, of companies associated with Bithumb last month, according to financial news agency Yonhap Infomax.
Prosecutors believe that Kang owned Bithumb affiliates and took part in boosting the stock prices of these companies by disclosing good news to the markets, JTBC reported.
Kang’s younger sister, Kang Ji-Yeon, is the chief executive of publicly-listed companies Inbiogen and Bucket Studio, both of which are associated with Bithumb.
Kang has denied the allegations, saying he no longer had a stake in related companies.
Decrypt has contacted South Korea’s Supreme Prosecutor’s Office and Bithumb for comment.
The new arrest is unrelated to a separate probe into possible tax evasion at Bithumb, which was reported by Yonhap last month.
Bithumb’s bumpy ride
One of the few Korean crypto exchanges to have survived a 2021 crackdown in the country, Bithumb has faced a steady stream of legal issues over the last few years.
Last month, another former chairman, Lee Jung-Hoon, was found not guilty of fraud charges related to the exchange.
The company also reportedly made it onto Sam Bankman-Fried’s shopping list at one point when the FTX founder was buying up crypto firms around the globe. No deal was ever announced.
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