South Korean law enforcement officers have reportedly arrested Kang Jong-hyun, the owner of major cryptocurrency exchange Bithumb.

Prosecutors say he manipulated stock prices and embezzled nearly $50 million.

Facing possible prison time

According to local coverage, Kang Jong-hyun, who is believed to be the actual owner of Bithumb, was arrested today (Feb 2) in South Korea. The authorities issued an arrest warrant was issued for him a week ago on allegations that he violated the country’s financial laws, manipulated stock prices and stole 60 billion won (nearly $50 million).

The police officers also detained Jo Mo, a person who was part of Kang’s inner circle and a representative of the cryptocurrency platform.

It’s worth noting that another Bithumb executive allegedly destroyed key evidence, including hard drives and CCTV recordings, that could have shed more light on the case. He recently received a prison sentence.

The prosecution further contended that the exchange manipulated the valuation of a currency listed on the trading venue. This prompted a thorough investigation and raiding from the company’s headquarters in the capital Seoul.

Kang has previously denied all the allegations against him. His name, however, is shrouded in mystery. The 41-year-old registered most of her business, her real estate and numerous her vehicles in the name of her brother, Kang Ji-yeon, prompting an investigation against her as well.

Local media have recently indicated that the mystery man is dating Park Min-young (one of the most famous Korean actresses).

Former Bithumb Chairman Found Not Guilty

The Seoul Central District Court ruled last month that Lee Jung-hoon, the former president of the exchange, did not commit fraud and thus evaded eight years in prison.

He was accused of violating the Law on Aggravated Punishment of Specific Economic Crimes and embezzling more than $87 million from BK Group Chairman Kim Byung-gun during negotiations over the Bithumb acquisition in 2018.

“It cannot be admitted that the proceeds of the sale of shares have been alienated by an error caused by fraudulent acts, such as the facts of the accusation, based solely on the evidence presented by the prosecutor,” said the judge.

Park Mo, the vice president of Seer (Bithumb’s largest shareholder), was also under investigation on charges of embezzlement and stock price manipulation. However, he was found dead late last year in front of his home in Seoul. The initial investigation found no signs of possible murder, meaning Mo could have killed himself.

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