The Kang brothers have been charged with theft, breach of trust, and market manipulation.
According to the South Korean financial outlet InfoMax, multiple executives at the South Korean cryptocurrency exchange Bithumb are now facing embezzlement and market manipulation accusations.
An arrest warrant has been filed for Kang Jong-hyeon, who is regarded to be the “real owner of Bithumb” under these charges.
Members of the legal community verified on Wednesday that Kang and two of Bithumb’s executives had been sentenced on embezzlement and breach of trust charges by the Seoul Southern District Prosecutor’s Office. They have also been accused under the Capital Markets Act with fraudulent illegal transactions.
Kang Ji-yeon, Kang’s younger sister, manages Bithumb affiliates such as Inbiogen and Bucket Studio, which specialise in footwear and distribution, respectively. The former is suspected of inflating the share prices of both companies by issuing convertible bonds.
“Prosecutors seized the conditions under which Mr. Kang misappropriated business money or manipulated stock prices, and they seized and searched Bithumb affiliates such as Vident, Inbiogen, and Bucket Studio in October of last year,” InfoMax reported.
The shares of each company were linked: Vidente is the single greatest shareholder of Bithumb, Inbiogen is the largest shareholder of Vidente, and Bucket Studio is the largest shareholder of Inbiogen.
For months, the prosecutors’ office had been investigating Bithumb for an alleged $70 million fraud committed by former chairman Lee Jung-hoon. Jung-hoon was charged in October and found not guilty earlier this month.
Two weeks ago, the prosecutors’ office reopened an inquiry into Bithumb to see whether Kang violated domestic taxes regulations, including an examination into his sibling’s activities.
Park Mo, Vidente’s vice president, was discovered dead in Seoul late last month, with rumours indicating that he committed suicide. During his stint as VP of Vidente, Park was said to be in charge of accounting for the Kang siblings. At the time, there were rumours that the Kang siblings had set up Park for embezzlement and market manipulation.
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