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Prosecutors Request 8-Year Prison Sentence for Bithumb Exec’s $70m Fraud Case

Lee Jung-Hoon, former Bithumb chairman, has been charged with scamming cryptocurrency investors of roughly 70 million USD (100 billion won) from the chairman of the BK Group, Kim Byung Gun.

A South Korean businessman may face up to eight years imprisonment for his alleged role in a cryptocurrency fraud scandal totalling $70 million USD, reports found on Wednesday.

Lee Jung-Hoon, former Bithumb chairman, has been charged with scamming cryptocurrency investors of roughly 70 million USD (100 billion won) from the chairman of the BK Group, Kim Byung Gun.

According to Yonhap News Agency, prosecutors involved in the case have asked the Seoul District Court to sentence Lee on 25 October, with a further hearing on 20 December.

Kim was chairman of the cosmetic surgery conglomerate in October 2018 and planned at the time to buy out the cryptocurrency exchange platform.

Kim alleges he transferred the $70 million to Lee for a “down payment” for the exchange, providing Lee listed the BXA token from the Blockchain Exchange Alliance formed.

Local prosecutors asked the 34th Criminal Settlement Section of the Seoul District Court for the sentence on Oct. 25, with a hearing to take place on Dec. 20, according to a report from Yonhap News Agency.

Bithumb never listed the token, causing the deal to fall through.

Responding, Lee Jung-Hoon’s lawyer stated the deal’s structure was a “typical stock sale contract” and had been carried out as needed according to the normal procedures for the contract.

Lee added in a final statement he was “very sorry for making it difficult for employees and causing social pressure,” just weeks after failing to join a parliamentary hearing on 6 October.

He stated he failed to show up for the meeting involving the $40 billion collapse of Terra Luna due to having a panic disorder.

Bybit Buyouts

The news comes just a day after Bybit, a Dubai-based cryptocurrency exchange, invested $3.8 million in the third-largest shareholder of the South Korean platform, T-Scientific, media reports found.

T-Scientific issued the 16 billion won of convertible debt at the end of September, allowing the firm to leverage its debt on interest, convertible to equity with stipulations.

The recent acquisition of debt will allow Bybit potentially a massive stake in the South Korean crypto platform with trading volumes of $239 million USD.

In late July, cryptocurrency trading platform FTX also entered talks with Bithumb to discuss acquiring the latter, Bloomberg reported, citing anonymous sources.

Both Bithumb and FTX spokespeople could not confirm the talks, the report added. Bloomberg based the report, which stated that the discussions have been underway for months, on an unnamed source.

The buyout comes as Sam Bankman-Fried, FTX co-founder, aims to buy out Bithumb to gain access to capital used for further acquisitions, it concluded.

No information published in Crypto Intelligence News constitutes financial advice; crypto investments are high-risk and speculative in nature.