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South Korean Bitcoin Exchange Bithumb Reportedly Raided by Police

The popular Bitcoin exchange Bithumb in South Korea has reportedly been raided by the authorities. This happened because of fraud allegations.

Bithumb Accused of Fraud by South Korean Police

According to a report by a local news outlet, the Intelligent Crime Investigation Unit of the Seoul Police authorities raided South Korea’s largest cryptocurrency exchange Bithumb. The authorities raided the company’s headquarters on Wednesday (September 2, 2020), under allegations of fraud.

Bithumb earlier conducted a presale of its native BXA tokens to investors worth 30 billion won ($25.2million), which was supposed to be listed on the exchange. However, the company reportedly failed to list the token, costing a massive loss to investors.

Consequently, law enforcement stormed the exchange’s headquarters, searching, and confiscating documents. Also, Lee Jung-hoon, Bithumb Chairman, is said to be under investigation by local authorities for fraud.

South Korean authorities have recently come down hard on local cryptocurrency exchanges. As reported by CryptoPotato late Agust, police stormed Coinbit’s office on allegations that the platform inflated most of its trading volume. Faking trading volume gave Coinbit a profit of $85 million.

Indeed, South Korean authorities have a history of coming down hard on crypto exchange operators in the country. Back in November 2019, senior executives of the Coinup cryptocurrency exchange were indicted on fraud charges with the CEO bagging a 16-year jail term.

At the time, prosecutors accused the principal agents of the exchange of orchestrating a crypto scam to the tune of $386 million. Some of these fraudulent activities involved deceiving users with fictitious investment schemes promising high returns of up to 200% in as little as eight weeks.

South Korea Maintains Grip on Local Crypto Scene

Crypto exchanges in South Korea are constantly under the microscope, with regulators looking to ensure robust compliance with existing financial guidelines. Earlier in the year, the country’s legislature passed a landmark bill that legalized crypto trading. Part of the requirements in the bill was the enforcement of real-name cryptocurrency trading accounts to prevent fraud.

The tough regulatory climate in the country contributed to a significant decline in trading volume in 2019, with many platforms on the brink of bankruptcy. Local blockchain projects were reportedly electing to list their tokens on overseas exchanges.

Apart from strict regulations for exchanges, South Korea is also pushing forward with regularizing its cryptocurrency tax regime. Back in June, the country’s Finance Minister argued that crypto gains should fall under the country’s tax laws.


https://cryptopotato.com/south-korean-bitcoin-exchange-bithumb-reportedly-raided-by-police/

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cryptohero8
I am a believer of the HODL philosophy because we are still in the nascent stage of blockchain technology. Although we are in a bear market now, my outlook on the adoption and growth of blockchain solutions remains unchanged. Blockchain transactions has been growing exponentially and demand for cryptocurrency like Bitcoin [BTC], Ethereum [ETH], Ripple [XRP], Litecoin [LTC] and other Altcoins will only continue to grow exponentially in the next five to ten years.

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