'Bithumb Embezzlement Suspicion' Kang Jong-hyun Denies Charges... "Does Not Constitute Violation of the Act"

Kang Jong-hyun (41), who has been identified as the central figure in the embezzlement case amid suspicions of being the real owner of Bithumb, denied the charges in court.

On the morning of the 19th, the Criminal Division 12 of the Seoul Southern District Court (Presiding Judge Dang Woo-jeung) held the second trial session for Kang, Bithumb affiliate CEO Cho, and two other affiliate employees, who are accused of fraud under the Capital Markets Act. Kang and the others denied the charges during the trial. Although the first trial session was held on the 22nd of last month, the trial stalled as none of them admitted to the charges.

[Image source=Yonhap News]

According to the prosecution, Kang and others are accused of embezzling approximately 62.8 billion KRW while operating the company until September last year. They are also charged with violating disclosure obligations or making false disclosures despite changes in their holdings related to convertible bonds (CB). Additionally, they are accused of spreading false information in July last year that Vidente was negotiating a sale with the U.S. virtual asset exchange FTX, then selling about 3.4 million shares of Vidente stock to gain an unfair profit of 8.4 billion KRW.

Kang’s defense argued that legally, the actions do not constitute a violation of the Capital Markets Act and claimed innocence. The lawyer stated, "Regarding the fraudulent holding of convertible bonds, Kang Jong-hyun changed his shareholding by more than 1% through a nominee account but did not disclose it within five days, which is claimed to be a violation of the Capital Markets Act. However, since this was a loan contract, it does not fall under the disclosure obligation (in this case)."

He continued, "Regarding the false disclosure, the changes at that time were reported as they were, and nothing was omitted. Even if it could be considered a disclosure violation, since the false disclosure was made after the shares were disposed of, fraudulent unfair trading does not apply." He also added that there is no causal relationship proving Kang benefited from false disclosures.

Regarding the breach of trust charges, they argued there was no intent, and although efforts were made to negotiate a sale with the U.S. FTX, the sale did not proceed, so no false facts existed. Concerning the embezzlement charges, they acknowledged that funds were withdrawn to affiliate companies but stated that contract documents need to be reviewed.

Regarding the charges of evidence destruction and harboring a criminal, which apply only to Kang, the defense admitted to evidence destruction but argued that in terms of harboring, "there was no specific instruction given, only funds were provided."

Cho and two affiliate employees are charged as accomplices but claimed they only followed orders from superiors, so if found guilty, only aiding and abetting charges should apply. Cho’s side stated, "It is true that I was the representative of the affiliate, but the actual instructions came from Kang. Cho only lent his name."

The next trial session is scheduled for 10:30 a.m. on the 26th.

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