South Korean authorities arrested Kang Jong-hyun, who is said to be the real owner of a local cryptocurrency exchange called Bithumb. He is accused of stock manipulation and embezzlement.
Local media outlets have reported that Kang Jong-hyun was detained on suspicion of embezzlement. On January 25, the businessperson was given the order to be arrested by the Seoul Southern District Court. He is charged with breaking a duty, taking advantage of the market, and doing business in a way that was against the law.
Read More: Bithumb Must Compensate Investors for Monetary Losses: South Korean Court
He is the older sibling of Kang Ji-yeon, the CEO of Bithumb subsidiary Inbiogen. The company’s main holding is in Vidente Vidente, with the highest stake in Bithumb (at 34.2%).
Prosecutors say the brothers worked together to steal money from their company, Inbiogen, and to make the stock prices of a video production company, Bucket Studio, go up artificially. They did this by issuing convertible bonds.
In a written statement on the company’s website, Kang Ji-yeon, the CEO of Bucket Studio, apologized to the company’s shareholders and said that the claims against his brother were “unconfirmed.” He also said he would help the police with their investigation by working with them.
This month, the highest court in South Korea told Bithumb to reimburse over $200,000 in fines to customers who lost money when the service went down in 2017. A previous court decision that went in favor of Bithumb and against the investors has been overturned by the final decision.
