Bithumb raided by South Korean prosecutors over embezzlement suspicion

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Bithumb raided over ex-CEOs $2M embezzlement for apartment.
Listing fee rumours add scrutiny as Bithumb eyes IPO in 2025.
The probe threatens Bithumbs reputation and public market debut.

Seouls Southern District Prosecutors Office on March 20 reportedly raided the offices of the Bithumb crypto exchange in South Korea, igniting a fresh wave of scrutiny over the companys financial practices.

The Seoul Southern District Prosecutors Office is investigating the cryptocurrency exchange for allegations that Kim Dae-sik, Bithumbs former CEO and current adviser, misappropriated company funds to finance a personal real estate purchase.

Notably, the authorities are examining a 3 billion Korean won deposit (approximately $2.25 million) allegedly provided by Bithumb as a lease deposit. Prosecutors suspect Kim diverted the funds to buy a private apartment, raising concerns about broader financial misconduct and lapses in internal controls at the exchange.

Bithumb acknowledges the allegations

Bithumb has acknowledged elements of the accusations but maintains that the issue was resolved internally.

A spokesperson told The Chosun Daily that Kim secured a loan to repay the full amount following an earlier investigation by South Koreas Financial Supervisory Service (FSS).

Although the crypto exchange claims no financial harm remains, prosecutors continue their inquiry, signalling ongoing concerns about governance and compliance at the crypto firm.

Questionable listing practices fuel the controversy

Adding to the turmoil, reports have surfaced suggesting Bithumb engaged in questionable listing practices.

According to a March 20 Wu Blockchain report citing anonymous sources, multiple crypto projects allegedly paid exorbitant intermediary fees to secure token listings on both Bithumb and its chief competitor, Upbit. One project reportedly paid $2 million, while another is said to have spent $10 million to intermediaries allegedly linked to Upbit shareholders and market makers.

Some projects also indicated that they provided an intermediary fee ranging from 3% to 5% of the total token amount, and eventually managed to get listed on Upbit successfully. However, not all projects paid the intermediary fees. Among the seven projects that WuBlockchain
Wu Blockchain (@WuBlockchain) March 20, 2025

In some cases, fees reportedly reached 3% to 5% of a tokens total supply, hinting at systemic issues within South Koreas crypto exchange ecosystem.

Though unverified by official sources, these allegations have cast a long shadow over Bithumbs reputation.

As of now, neither Bithumb nor Upbit has issued a formal response, leaving speculation to swirl across the industry.

Bithumbs IPO plans under threat

The embezzlement investigations and the listing malpractices allegations come at a sensitive time for Bithumb, which has been accelerating efforts to go public.

On March 18, just two days before the raid, Business Post reported that CEO Lee Jae-won was pushing forward with long-delayed initial public offering (IPO) plans.

Bithumb recently restructured its business to reduce legal risks associated with its major shareholders and signalled an intention to list on South Koreas stock exchange as early as 2025.

However, Bithumbs IPO journey has been fraught with obstacles. Plans first announced in 2020 stalled after legal troubles and leadership scandals, including fraud charges in 2021 against former chairman Lee Jeong-hoon, who was later acquitted.

In 2023, Bithumb appointed an underwriter to revive its listing ambitions, and in 2024, it launched a non-exchange business to streamline its market entry.

Nevertheless, a 57% drop in annual revenue for fiscal year 2023 has dampened optimism. Now, with a criminal probe underway, Bithumbs path to a public offering faces even greater uncertainty.

Read more: https://coinjournal.net/news/bithumb-raided-by-south-korean-prosecutors-over-embezzlement-suspicion/

Text source: CoinJournal: Home

Markets Bithumb Cryptocurrency News Written by Charles Thuo On Thu, 20 Mar 2025 Disclaimer: Financial information and news are not financial advice, read the disclaimer. Buy & sell Crypto in minutes

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