3 months ago 2 min read

First Trial of $70M Scam, Former Chairman of Bithumb was Found Not Guilty

bithumb-lee jung hoon-kim byeong gun-bxa

According to Korean media, Lee Jung-hoon, the former chairman of Bithumb, tried an innocent defendant in the initial trial for the $70 million fraud.

The former chairman of Bithumb will be jailed at first instance today for a $70 million swindle.

Lee, who was accused with fraud and other offenses under The Specific Economic Crimes Aggravation Act, was declared innocent by the Seoul Central District Court's 34th Criminal Agreement Division (Chief Justice Kang Gyu-tae) during the trial that was held this afternoon.

Previously, former Chairman Lee proposed in October 2018 that BK Medical Group Chairman Kim Byeong-gun take control of Bithumb and co-manage, issue the fictitious "Bithumb BXA Coin," falsely claim that it will be listed on Bithumb, and receive about $100 million as a prepayment (at the exchange rate at the time; in July 2021, he was charged without detention by the prosecutor's office with the crime of stealing about 110 billion won).

Although the prosecution sought eight years in prison for Lee, the court today found him not guilty.

According to the court, it was challenging to conclude from the prosecution's evidence alone that former Chairman Lee had promised Chairman Kim to list BXA Coin.

The judge stated: "During the rewriting process, a rule about the requirement to list currencies in the draft contract was omitted."

He added that it is possible that Chairman Kim would only accept the claims of the former Chairman Lee given his extensive expertise and industry-specific knowledge.

According to the judgment, Bithumb is supposedly one step further to regaining trust.

This is due to the fact that Bithumb's new business may grow faster now that the owner's risk to Lee, who is considered to be the company's true owner, has been partially mitigated.

Foreign investors like JP Morgan even advocated for the acquisition of Bithumb in 2021, but it was shelved owing to complex governance and owner risk.

However, since the court that day ruled in favor of Bithumb, it acquired momentum to use its subsidiary Bithumb Meta to expand internationally.

Additionally, it is determined that Bithumb's approach for breaking into domestic content and entertainment areas, such as NFT-based music and sports, has acquired some traction.

Bithumb, on the other hand, stated in a statement:

"We honor the court's decision (...). The former Chairman Lee Jeong-hoon is not at all involved in the management of Bithumb, which is run by a qualified management system. No matter how the test turns out, Bithumb will keep working to deliver the finest service for safer and more convenient transactions."
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