South Korean court finds former Chairman of Bithumb ‘not guilty’ of fraud

Lee Jung-hoon, the former chairman of the crypto exchange Bithumb, was acquitted by a South Korean court on Jan. 3.

The 34th Division of the Criminal Agreement of the Seoul Central District ruled that the evidence presented was insufficient to incriminate Jung-hoon, as per a local news report.

Jung-Hoon was accused of violating the Act on the Aggravated Punishment of Specific Economic Crimes by committing fraud.

In response to the ruling, Bithumb said that it respects the court’s decision. However, it clarified that Bithumb is currently under a “professional management system” and that Jung-hoon plays no part in the exchange’s management at present.

On Dec. 30, 2022, Park Mo, the vice president of Vidente — Bithumb’s largest shareholder — was found dead, according to local reports.

It was suspected that Mo took his own life after being named the primary suspect in an investigation launched by South Korean prosecutors. The prosecutors were investigating Mo’s involvement in stock price manipulation and embezzling funds at Bithumb-related companies.

Failed attempt to acquire Bithumb led to years-long dispute

Cosmetic surgeon Kim Byung-gun, who is the founder and director of BK Hospital and BK Medical Group in Singapore, discussed jointly acquiring Bithumb with Jung-Hoon in 2018. The two partnered and established the BTHMB consortium in Singapore to acquire a 50% stake in Bithumb.

Byung-gun allegedly paid $70 million as a “contract fee” to Jung-Hoon, who promised that Bithumb will list the BTHMB consortium-issued BXA token. Jung-Hoon allegedly convinced Byung-gun that the proceeds from the token listing would pay for the remaining amount required to complete the acquisition of Bithumb.

The BXA token was never listed and the acquisition deal fell apart since the BTHMB consortium failed to pay the remaining amount.

In 2019, Jung-Hoon sued Byung-gun in a Singapore civil court, accusing him of selling BXA tokens on his behalf without his permission. In 2020, Byung-gun sued the former Bithumb chairman for allegedly defrauding him of $70 million. 

In August 2022, the Singaporean court found Byung-gun guilty and ordered him to return the proceeds from the BXA sales — approximately $17 million — to the BTHMB consortium. 

In the case against Jung-Hoon, South Korean prosecutors were seeking a sentence of 8 years in prison. However, in the Jan. 3 ruling, the judge noted that given Byung-gun’s considerable knowledge in the field of cryptocurrencies and blockchain, it is not probable that Jung-Hoon was able to deceptively make him believe that the listing of BXA on Bithumb will cover the cost of Bithumb’s acquisition. 

The South Korean acquittal of Jung-Hoon marks the assumed end of a long-drawn legal battle surrounding Bithumb.