Bithumb ex-chairman could face 8 years prison over alleged $70M fraud

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The former chairman of the South Korean cryptocurrency exchange Bithumb, Lee Jung-hoon, could face a possible maximum sentence of eight years in prison if found guilty on charges related to an alleged fraud worth $70 million.

Local prosecutors asked the Seoul District Court for the sentence on Oct. 25, with the sentencing hearing will be held on Dec. 20 according to a report from Yonhap News Agency.

It’s alleged that Jung-hoon defrauded $100 billion won or $70 million from Kim Byung Gun, chairman of the cosmetic surgery company BK Group in October 2018 during negotiations for Gun to purchase the Bithumb exchange.

Gun alleges he paid $70 million to Jung-hoon as a “down payment” towards buying the exchange on the condition that it lists a token called BXA created by the Blockchain Exchange Allicance which Gun helped to form.

The proceeds from the token listing would’ve allegedly gone towards helping pay for the acquisition, but Bithumb never listed it and the deal fell apart.

“The structure of this case is a typical stock sale contract,” Jung-hoon’s lawyer reportedly said as a defense, adding that it was carried out faithfully according to typical procedures for such a contract.

Related: S. Korean watchdog goes after crypto whales to ensure AML compliance

Jung-hoon said in his final statement to the court that he was “very sorry for making it difficult for employees and causing social pressure.”

Earlier this month Jung-hoon failed to attend a parliamentary hearing on Oct. 6 regarding the $40 billion wipeout of the Terra ecosystem citing a panic disorder as the reason for his absence.