Crypto: The ex-president of an exchange accused of fraud

Lee Jung-hoon is the former president of crypto exchange Bithumb. Created in 2014, the exchange comes in two versions: the website and the application. That said, the former president of the South Korean platform was recently charged with fraud. Find out what it is.

A $70 million scam

According to a Korean media, the ex-president of Bithumb would have fraud during an operation with senior executive Kim Byung Gun. Gun happens to be the president of cosmetic surgery company BK Group. In October 2018, he conducted negotiations with Lee Jung-hoon to acquire the Bithumb exchange. Now he’s accusing the ex-president of the exchange of having him defrauded 100 billion wonor about $70 million.

Kim Byung Gun said he paid the $70 million to Lee Jung-hoon as a down payment. Indeed, he had to buy the platform with this money. Lee had issued the token BXA of the crypto Bithumb Coin to deceive him. At the time, he promised that the tokencreated by the Blockchain Exchange Allicance, would be listed on Bithumb.

Damage of approximately $70 million

But, this was not the case, and the acquisition of the platform by Kim Byung Gun was ultimately a failure. Lee and Kim were then sued by those who invested in BXA. Since Kim was himself a victim of Lee, he was not punished by law.

What the ex-president of Bithumb risks

According to Lee’s attorney, “the structure of this crypto deal is a typical stock sale contract“. The lawyer clarified that the deal was carried out strictly following the procedures typical of such a contract. He added that “the negotiation lasted 90 days“. He explained that Gun is only suing Lee to avoid legal action that victims of the investment may take.

Indeed, if the ex-president of Bithumb is recognized guilty in this case, he could be sentenced to eight years in prison. The hearing during which his sentence will be known has been set for December 20. Lee Jung-hoon claimed to be “really sorry for making it difficult for employees and causing social pressure“. It is one of the highest profile cases in the crypto industry in the country.

For prosecutors, Lee Jung-hoon committed fraud and he must be severely punished. For this, he must be sentenced to eight years in prison, they said. According to the prosecution, “the amount of damage is very large, and the damage is particularly large for ordinary investors“.

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