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Bithumb Again Undergoing Investigation by Seoul police- 5th Largest Crypto Exchange

Bithumb, the 5th largest cryptocurrency exchange in spot trading is going to be seized on charges of economic fraud. 

One of the major global cryptocurrency exchanges from South Korea, Bithumb is undergoing an investigation that can by and large globally affects the trustworthiness of people towards crypto exchanges.

The Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit is strongly taking all the measures to provide safety to the crypto investors and traders residing in South Korea. In the process, recently swooped Bithumb in connection with crypto scam/fraud after the Coinbit incident– The South Korean crypto exchange involved in $85 million forgeries by “wash trading” and affected over 2,52,000 platform users.

The local publication Seoul Shinmun reported on Sep 2, 2020, about the raid on Bithumb while informing that Bithumb Korea and Chairman of the board of directors of Bithumb holdings, Lee Jung Hoon are under the scrutiny in a fixture of BXA token.

“On the 2nd, the police began a seizure and search for Bithumb” 

Allegedly, the company and Chairman Lee are involved in economic crime concerning fraudulently collecting 30 billion won (~$25 million) from the victims and escaped the property abroad. 

Bithumb & BXA token Background

The Investigation Unit is searching Bithumb’s Gangnam-gu, Seoul headquarter, on the charges of fraud and would confiscate once uncovered the complete matter.

The publication while citing the Korean government mentioned that the investigation and search for seizure is stemmed due to alleged investment fraud in connection with BXA crypto token issuance scheme which never listed on the platform.

The victims are railing against Bithumb and claiming that Chairman Lee including other company members involved in the pre-sell of 30 billion won (~$25 million) of BXA tokens that were not listed.

During Oct 2018, BTC Korea Holdings, the operator of Bithumb with a 76 percent stake in the exchange announced the acquisition of Bithumb to BK Global Consortium with 51% staking rights.

Meaning, for 400 billion won ($333 million) Bithumb was going to be BK Group’s property. Though Chairman Dr. Kim Byung-gun did not make the final payment and the deal was collapsed. Besides the deal, the issuance of the native BXA token scheme also spread in the crypto market that was supposed to be listed on Bithumb exchange, though failed.

The complete details are yet to be revealed by the companies about the closure and seizure. The article would be updated on receiving further information.

Bithumb’s Hacking History 

Though the exchange enjoys the #5 ranking in spot trading on CoinMarketCap, and 4.11 million visitors record from May to July, the history tries to aware crypto-focused investors, seeing the past records on security measures and reliability which Bithumb has suffered many a time.

In June 2017, Bithumb was hacked and the database of approx. 31,800 users were stolen from the personal computer of an employee along with huge money.

In June 2018, around $32 million (35 billion won) of cryptocurrency was hacked. The event happened soon after Coinrail lost crypto assets worth 40 billion in a cyberattack.

The third time, in March 2019, crypto assets worth of $20 million in EOS and Ripple crypto assets were stolen from the platform.

Reportedly, the investigation and espionage are still going on against the North Korean hackers unit allegedly called Lazarus Group.

As per the records, Bithumb is holding 8 million registered users, 1 million mobile app users, and as of date over $1 trillion aggregate transaction volume has been recorded on the major digital asset exchange.