Cryptocurrency: Bithumb former chairman declared not guilty of fraud

Photo by: Bithumb Newsroom

Wednesday, January 4, 2023 10:35 AM UTC

The 34th Division of the Criminal Division of the Seoul Central District Court handed down a “not guilty” verdict to Lee on Tuesday, Jan. 3. The judge came to a decision after determining that the evidence presented by the prosecution does not show the former Bithumb chairman had purposely defrauded a businessman.

Bithumb is the largest cryptocurrency exchange in South Korea, and Lee is also its de facto owner. As per Yonhap News Agency, he was previously charged for allegedly stealing KRW112 billion or around $88.1 million, a few years ago.

The prosecutors said that the offense happened after Lee offered to sell Bithumb to an executive surnamed Kim. The supposed buyer was also identified as the chairman of the BK Group.

While in the process of negotiation, Lee reportedly made a promise to Kim, saying that the unlisted crypto coin called BXA would be issued and eventually listed. Subsequently, with the payment earned from pre-selling BXA, Kim used part of the down payment.

However, this has become problematic because the BXA coins were not listed as promised, and the acquisition of Bithumb Korea did not take place as well. For its decision, the court explained that it could not accept the argument that Lee promised the listing of BXA coins just based on a contract between the two parties involved.

Initially, investors who lost large sums because of the digital tokens were the ones who filed a complaint against Kim and Lee. They accused them of fraudulent sales of the BXA coins. But the case was dismissed by prosecutors after concluding that the two did not conspire and Kim was also a victim.

“The structure of this case is a typical stock sale contract,” Finance Feeds quoted Lee’s lawyers as saying in its argument. “Negotiations were held for 90 days and both the defendant and Kim are experts, and lawyers from law firms were involved in both negotiations.”