Bithumb Shareholder Kang Jong-Hyun Arrested For Alleged Embezzlement, Fraud

A South Korean businessman named Kang Jong-Hyun, who is reported to have control over the Bithumb cryptocurrency exchange, has been arrested on charges of fraud, embezzlement, and breach of trust, according to CoinDesk Korea.

The arrest comes as part of an ongoing investigation into the actions of several Bithumb executives, including Kang's sister, Kang Ji-Yeon, who serves as CEO of two publicly traded Bithumb affiliates, Inbiogen and Bucket Studio.

Despite reports linking Kang to Bithumb, the company issued a statement denying any connection to him.

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"Kang Jong-Hyun is not related to Bithumb Korea. Definitely, he was NOT the former chairman of Bithumb Korea. NEVER," the company's PR team stated in an email. "We deny allegations and suspicions that he is our owner."

This arrest is just the latest challenge for Bithumb. The company's offices were recently raided as part of an investigation into price manipulation of a coin listed on the exchange. Earlier this year, the National Tax Service opened an investigation into potential tax evasion at Bithumb Holdings and its affiliates.

Bithumb is also being investigated for theft allegations and stock price manipulation.

Still, Bithumb remains one of only five Korean crypto exchanges still in operation following a 2021 crackdown in which roughly 70 domestic exchanges were forced to shut down due to failure to meet regulatory requirements.

The arrest of Kang Jong-Hyun comes about a month after Park Mo, a vice president of Vidente (Bithumb's largest shareholder), was found dead outside his home in South Korea after being named as a suspect in the fraud investigation.

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