Kang Jong-Hyun accused of manipulating stock prices of several affiliated companies and embezzling corporate funds
The de facto owner of one of the largest South Korean crypto exchanges Bithumb Kang Jong-Hyun was arrested in South Korea. He is accused of manipulating share prices of several affiliated companies and embezzling 60 billion Korean won ($48.7 million).
Bithumb is South Korea’s second-largest crypto exchange after Upbit, founded in 2014. Daily trading volume on the platform in the last 24 hours was $320 million. The platform offers 191 coins and 290 trading pairs.
The Seoul South District Prosecutor’s Office issued an arrest warrant for Kang and two other people connected to the case on Jan. 25. The owner of Bithumb was detained on the morning of Feb. 2, according to the report.
Law enforcement authorities suspect that Kahn played a key role in manipulating the stock prices of subsidiaries of Bithumb, Bucket Studio and Inviogen. Bucket Studio is the largest shareholder of Inviogen, which in turn is the largest shareholder of Vident, which has the largest stake in Bithumb (34.2%).
The head of Inviogen is the younger sister of detainee Kang Jong-Hyun. Prosecutors believe they stole corporate funds and manipulated stock prices of the named companies together. Kang’s sister is under further investigation. Her brother denies the charges against him.
Simultaneously with the case, prosecutors are investigating price manipulation of one of the assets listed on Bithumb. Last week, the exchange’s office was searched “to ensure the security of transaction information in a particular coin.”
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