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Wednesday, November 25, 2020

South Korean cryptocurrency exchange Bithumb faces a setback

  • Bithumb, the biggest South Korean cryptocurrency exchange is in serious trouble as the police investigates.
  • Gangnam District based crypto-exchange Bithumb is being raided by police for the second time in a week.
  • Bithumb has not yet released an official statement as a post to the raid on 7th September.

Despite being the biggest cryptocurrency exchange in South Korea, Bithumb becomes the second crypto-exchange to be under the investigation of the police. Reportedly, the Seoul Metropolitan Police is closely investigating the exchange to store essential shreds of evidence.

Origin of the raid

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The executive officer at Bithumb, Lee Jung-hoon was accused of defrauding customers for allegedly selling BXA tokens and promoting them as Bithumb’s native tokens. Even though, BXA token was neither launched nor listed on the exchange. Beside, Bithumb also announced holding an Initial Public Offering.

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As a result, Lee Jung-hoon’s involvement in such a scam made investors lose their millions of dollars. In total, investors noticed a loss of $25 million.

The police raid attributes to the executive officer of Bithumb facing accusations such as fraud. The initial raid was conducted on 2nd September by the Seoul police. Prior to the circumstances, Bithumb is another cryptocurrency exchange that came under investigation of the Seoul Police.

Coinbit, the third biggest exchange in South Korea was accused of conspiring and printing $85 million by manipulating the market. The South Korean authorities are taking immediate actions to address such crimes.

Cryptocurrency exchange Bithumb stands still

Even after such news, Bithumb’s image looks unaffected. However, it will steadily lose its credibility after these allegations. Bithumb’s history has not been very promising, including its involvement in the data breach in 2017. Following that, the Seoul Central District Court held Bithumb responsible for the data breach.

Coin360, a crypto tracing tool shows that Bithumb is not only the biggest exchange in South Korea but it is the 9th largest cryptocurrency exchange in the world. The daily trading volume on the platform remains the same as it was before the raid, except it was down by 2% yesterday, perhaps because of the current scenario. The Coin360 data also reveals that Bithumb is topping $250 million in terms of the daily trading volume.  

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