Last Updated on November 20, 2023 by Bitfinsider
Lee Jeong-hoon, the former chair of Bithumb, one of South Korea’s largest cryptocurrency exchanges, is embroiled in a legal struggle and might face an eight-year prison sentence, with a verdict set for January 18, 2024.
According to Korean local media reports, authorities believe Lee sought to restructure Bithumb’s governance in order to profit from exchange tokens while skirting financial restrictions. The investigation has been continuing since October 2018, when the previous chair reportedly cheated a total of 100 billion won ($70 million) during discussions for the acquisition of Bithumb from Kim Byung-gun, chair of the cosmetic surgery company BK Group. Prosecutors believe Lee was aware of issues with the BXA token listing but failed to inform Kim. Despite the concerns with the listing, Lee allegedly collected funds without alerting Kim about the decision not to list the BXA coin.
Prosecutors in South Korea sought an eight-year prison sentence for Lee.
Lee’s defense calls the charges into question, pointing out inconsistencies in Kim’s remarks and questioning his credibility. Lee insists on Kim’s ability to lead Bithumb, claiming that Kim was kept up to date on the status of the BXA token listing.
Lee is dealing with legal troubles stemming from claims of breaching the Act on Aggravated Punishment for Specified Economic Crimes, including fraud.
The outcome of Lee’s continuing appeal could establish a precedent for future judicial actions concerning bitcoin exchanges and governance. This development aligns with Bithumb’s plans for a Kosdaq initial public offering in 2025.
The outcome of the appeal will have a huge impact on Bithumb’s future and the destiny of BXA tokens. A guilty verdict could result in a re-evaluation of governance systems in bitcoin exchanges, potentially leading to heightened regulatory monitoring.
While the cryptocurrency community and investors await the outcome of the appeal, the case highlights the industry’s dynamic character and the need for well-defined legal frameworks to address governance challenges and maintain investor and stakeholder trust.
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