"BXA Listing Scam Denied"…Bithumb Draws Line on Real Owner Allegations

Former Chairman Lee Mo-jeon of the Board Sent to Prosecutors Last Month on Fraud Charges

On the morning of the 21st, the prices of cryptocurrencies including Bitcoin are displayed on the electronic board at Bithumb Gangnam Center in Gangnam-gu, Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Cryptocurrency exchange Bithumb clarified that it is not related to the case involving a specific shareholder, regarding the recent prosecution of Lee Mo, former chairman of Bithumb Korea and Bithumb Holdings, who was sent to the prosecution last month on fraud charges.

On the 21st, Bithumb stated in a press release, "Neither Bithumb as a corporation nor its CEO and employees are involved in the case," adding, "At the time, Bithumb proceeded with the listing review process for the cryptocurrency BXA but did not list it due to regulatory issues and measures to protect investors."

They continued, "The specific shareholder is just one among the shareholders and does not participate in company management at all," and added, "Bithumb is independently managed by professional executives and employees."

Earlier, former chairman Lee was referred to the prosecution on the 23rd of last month on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes. He is accused of promoting the listing of the cryptocurrency ‘BXA Token’ on Bithumb in October 2018 and selling approximately 30 billion KRW to investors, but ultimately failing to list it, causing damages.

Following the revelation of this case, commercial banks have established a policy to review the fraud and embezzlement history of executives and employees during the verification process for issuing real-name accounts to exchanges. According to the Specific Financial Information Act implemented in March, exchanges will be obligated to prevent money laundering starting at the end of September and must obtain real-name deposit and withdrawal accounts from banks to operate. Banks have included in the 16 requirements for issuing real-name accounts items such as ▲history of violations of financial-related laws ▲history of embezzlement or fraud involvement by representatives and executives ▲history of external hacking incidents. Recent incidents involving delays in trading and deposits/withdrawals are also expected to be subject to review.

Regarding this, Bithumb explained, "We are thoroughly preparing to comply with the reporting obligations within the deadline according to the Specific Financial Information Act and related laws and regulations," adding, "The delay occurred due to a traffic surge at certain times caused by increased trading volume, and emergency work such as server expansion was carried out in the early hours of the 21st to resolve the issue."

This content was produced with the assistance of AI translation services.