South Korean media YTN reported yesterday (20th) that the South Korean prosecution conducted a seizure search at the headquarters of Bithumb, the country’s second-largest cryptocurrency exchange, on March 20. This action was taken due to allegations that Bithumb provided 3 billion Korean won (over 2 million USD) to its former CEO and board member, currently an advisor to Bithumb, Kim Dae-sik, for the purpose of paying his apartment rental deposit and purchasing personal property.
(Background: South Korea’s second-largest exchange Bithumb considers an IPO in the U.S. Can it shake off the shadow of scandal and reclaim its leading position?)
(Background Supplement: Strong measures! South Korea’s tax authorities impose taxes of 83.3 billion Korean won on Bithumb users. Will Taiwanese exchanges follow suit?)
According to local media YTN, the Southern District Prosecutors’ Office of Seoul conducted a seizure search at the headquarters of Bithumb on March 20. This was based on allegations that the exchange provided 3 billion Korean won (over 2 million USD) to its former CEO and board member, currently an advisor, Kim Dae-sik, for the purpose of paying his apartment deposit and purchasing personal property.
Bithumb claims former CEO has repaid funds
However, according to a later report by CoinDesk yesterday, a representative from Bithumb stated during an interview that “some of the allegations” were indeed true. However, after the investigation by the Financial Supervisory Service (FSS) began, former CEO Kim Dae-sik immediately secured funds from a lending institution and fully repaid the financial assistance Bithumb provided to him.
In addition, “Wu Says Blockchain” also revealed on social media platform X yesterday regarding Bithumb’s scandal. The report indicated that multiple project parties disclosed that in order to list on the two leading South Korean cryptocurrency exchanges, Upbit and Bithumb, project parties would need to pay intermediary fees of around 10 million and 2 million USD, respectively. In response, Upbit quickly clarified, but Bithumb has yet to respond, once again putting Bithumb in the public spotlight. (Due to strict regulation of cryptocurrency trading in South Korea, every time a new token is listed on Upbit or Bithumb, it usually leads to a short-term price surge.)
Will this affect Bithumb’s IPO?
It is worth mentioning that the scandal involving Bithumb and the ongoing investigation by South Korean authorities comes at a time when the company is once again attempting to plan for an initial public offering (IPO). Bithumb’s CEO Lee Jae-won also revealed that the company is accelerating the IPO process and has completed restructuring to avoid potential legal risks posed by major shareholders.
According to previous reports from Dongxu, the official IPO date for Bithumb is expected to fall in the second half of this year. The company has also indicated that it may venture into the U.S. Nasdaq market, with news emerging during their interim shareholder meeting:
“We are considering listings on open markets such as Korea and the U.S. Nasdaq and have made the necessary preparations.”
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