Bithumb exchange owner Kang Jong-hyun has been arrested for allegedly misappropriating approximately $50 million, local news JTBC reported.
Executives at the South Korea-based cryptocurrency exchange have recently been facing fraud charges. For example, former chairman Lee Jung-hoon is accused of misappropriating about $70 million from a deal with BK Group chairman Kim Byung-gun. After an investigation into Jung-hoon's allegations, it turns out that the little-known Kang Jong-hyun is the owner of the exchange.
South Korean news outlet JTBC reported on Feb. 2 that the Seoul Southern District Court had issued an arrest warrant for Kang Jong-hyun.
Jong-hyun was arrested along with two Bithumb executives on charges of fraud, stock manipulation, and misappropriation of 60 billion won (about $50 million) worth of company funds. Further investigation revealed that Jong-hyun is the older brother of Kang Ji-yeon, the head of Inbiogen, an affiliate company that holds about 34.2% of Bithumb.
The two allegedly conspired to manipulate Inbiogen's stock price and misappropriated 60 billion won from the company.
Jonghyun has denied the allegations of embezzlement, saying he has no relationship with the company as he no longer holds shares in the company. Kang Ji-yeon added that the allegations against his brother were "unsubstantiated." However, he will cooperate with the authorities' investigation.
Meanwhile, South Korea's National Tax Service (NTS) said it was investigating Jonghyun and Kang Jiyeon's tax affairs for possible tax evasion and money laundering.
