Source: Cointelegraph Original: "{title}"
Updated on March 20, 10:50 AM UTC: This article has been updated to include Wu Says Blockchain's report on the token situation on Bithumb, which states that multiple crypto projects paid intermediary fees to have their tokens listed.
South Korean prosecutors conducted a raid on the cryptocurrency exchange Bithumb over suspicions that its former CEO embezzled funds to purchase an apartment.
Reports indicate that on March 20, the Southern District Prosecutors' Office in Seoul searched Bithumb's office in South Korea.
The investigation focuses on allegations that the cryptocurrency exchange provided its former CEO and board member Kim Dae-sik with a 3 billion won (over $2 million) apartment rental deposit; Kim currently serves as an advisor to the company.
Prosecutors expressed concerns about potential financial misconduct within the company, suspecting that Kim used part of the funds to purchase a personal apartment.
Bithumb claims its former CEO has repaid the funds.
Local media YTN reported that the Financial Supervisory Service (FSS) of South Korea had previously investigated these suspicions and referred the findings to the prosecutors' office.
In an interview with the Chosun Ilbo, a representative from Bithumb stated that some of the allegations are true.
The exchange claimed that following the FSS investigation, the executive immediately took out a loan from a lending institution. Subsequently, Bithumb stated that Kim has fully repaid the funds used to purchase the apartment.
In addition to the apartment incident, rumors have circulated online about projects paying intermediary fees to be listed on Bithumb. Wu Says Blockchain reported on March 20, citing anonymous sources, that two projects claimed to have paid $2 million and $10 million, respectively, to be listed on Bithumb and Upbit.
The report stated that these "intermediaries" are related to Upbit's shareholders and market makers. Wu Says Blockchain also noted that some intermediary fees reached 3% to 5% of the total token supply.
Upbit demands evidence of listing fees charged.
Upbit responded to Wu Says Blockchain's claims, requesting that they "clearly disclose the list of digital asset projects that have paid brokerage fees mentioned in X, and provide specific evidence and data to ensure our factual investigation and inquiry proceed smoothly."
Additionally, the exchange requested more information regarding allegations of illegal brokerage activities through intermediaries.
Bithumb faces investigation as it pushes for an IPO.
This investigation comes as the cryptocurrency exchange is once again striving to advance its listing efforts. On March 18, the Business Post reported that Bithumb CEO Lee Jae-won is accelerating the long-awaited initial public offering (IPO) process.
The report indicated that the company has undergone restructuring to eliminate judicial risks faced by major shareholders.
In 2021, Bithumb's former board chairman Lee Jeong-hoon was prosecuted on fraud charges. Following the South Korean Supreme Court's ruling of not guilty for the Bithumb executive, the exchange is expected to expedite its listing process in 2025.
Bithumb's listing plans date back to 2020, when local media reported that the trading platform had been preparing for an IPO.
However, the company has faced several obstacles that prevented it from successfully conducting an initial public offering. In 2023, the company selected an underwriter for its listing plans, reigniting rumors about its efforts to push for an IPO.
In 2024, these rumors were confirmed as South Korea's Bithumb established a non-exchange business division to expedite its debut in the stock market. However, at the same time, reports indicated that the exchange operator's annual revenue for the fiscal year 2023 had declined by 57%.
Related: South Korean banks take a "cautious approach" to Bitcoin reserves.
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