South Korean prosecutors are pushing for an eight-year sentence for Lee Jung-hoon, the previous chairman of crypto change platform Bithumb, for an alleged $70 million fraud.
In keeping with a report by the native media outlet Yonhap, prosecutors alleged that Lee had defrauded Kim Byung Gun, the chairman of Singapore-based BK Group, in a failed try to amass Bithumb earlier in 2018.
As per the report, Lee satisfied Kim to situation Bithumb Coin (BXA) by way of the BK Group-affiliated Blockchain Trade Alliance, with the reassurance that BXA can be listed on Bithumb.
Kim used among the proceeds from the BXA presale, about $25 million, to buy his stake in Bithumb. The token was additionally bought to quite a few different traders, accumulating roughly $45 million in gross sales.
Nevertheless, Bithumb didn’t finally listing BXA on its platform, leading to Kim’s acquisition of Bithumb failing and inflicting different traders to undergo vital losses. In keeping with prosecutors, Lee had no intention of itemizing the token because it was a part of his elaborate ploy to defraud his associate.
The affected traders sued each Lee and Kim for fraud. Nevertheless, South Korea’s investigative company concluded that Kim was additionally a sufferer, similar to the opposite traders concerned within the BXA token sale.
Prosecutors are pushing for Lee to be convicted of fraud based mostly on South Korea’s Act on the Aggravated Punishment of Particular Financial Crimes. Lee’s sentencing listening to is scheduled for December 20.
Prosecutors: The Injury is Very Giant
Throughout a listening to earlier than the Seoul Central District Court docket, prosecutors identified that “the quantity of harm could be very massive, and the injury is very nice for peculiar coin traders.”
Lee’s legal professional, nonetheless, claimed that the token sale was “faithfully” carried out in keeping with the same old process.
“The construction of this case is a typical inventory sale contract. The negotiation passed off for 90 days,” the lawyer mentioned.
The legal professional additional alleged that BK Group’s Kim sued Lee to keep away from legal duty for his half within the full failure of the BXA token sale.
In his assertion, Lee apologized for his actions, saying:
“Bithumb was the primary change in Korea on the time of sale. I’m very sorry for making it troublesome for workers and inflicting social strain.”
In the meantime, earlier in July, crypto derivatives change FTX revealed plans to amass Bithumb as a part of its growth plan amid the continued crypto winter. It stays to be seen if the Sam Bankman-Fried change will proceed with the acquisition plans in gentle of latest developments.