Authorities in South Korea have begun an inquiry into Bithumb, one of the nation’s major cryptocurrency exchanges, amid accusations that the company misused its funds to aid a former executive in acquiring an apartment.
On Wednesday, officials from the Seoul Southern District Prosecutors’ Office conducted searches at Bithumb’s headquarters in Yeoksam-dong and several other sites, according to local media reports.
It has been reported that certain projects have shelled out as much as $10 million in fees to have their tokens listed on both Upbit and Bithumb.
The investigation centers around claims that Bithumb facilitated a 3 billion KRW ($2 million) security deposit for the rental of an apartment located in Seongsu-dong, Seoul, for Kim Dae-sik, the company’s former CEO and current advisor.
The Financial Supervisory Service, South Korea’s financial regulatory body, initially analyzed the situation before referring it to prosecutors. A representative from Bithumb reportedly admitted to some of the allegations, stating that Kim had reimbursed the entire loan amount after obtaining a loan himself.
Bithumb has encountered several legal issues in recent years, including tax investigations and a raid prompted by a price manipulation inquiry. This latest challenge arises as the company is rumored to be contemplating a share listing on the Nasdaq.
Bithumb could not be reached for a comment at the time of this writing.
Disclaimer: The information used in this article has been translated with the assistance of artificial intelligence.
UPDATE (March 20, 12:33 UTC): Additional details and context have been added.