an officer from South Korean crypto exchange bithumb Under investigation – on suspicion of receiving kickbacks in return for coin listing facilities.
Per Chosun Ilbo, the allegations surrounded a man surnamed Lee (first name undisclosed for legal reasons). Lee was described as “an employee of Bithumb Holdings”, the “Bithumb parent company”.
The identity of the coin in question was also withheld. In South Korea and other regions, lesser-known altcoins tend to increase in value when they are listed on major exchanges. Some suspect that “engineering” listings may be used as a price manipulation tool for small-cap coins.
The investigation is being conducted by the Financial Investigation Division of the Seoul Southern District Prosecutor’s Office. Authorities “searched the offices” of Bithumb Holdings and Lee’s home — and seized several items and documents.
A spokesperson for Bithumb declined to comment on Chosun’s case, but confirmed that an “investigation by prosecutors” was ongoing.
More South Korean Crypto Exchange Officials Accept Cash for Coin Listing?
The allegations are the second major blow to the South Korean crypto exchange industry within as many months. In February, a former Kionon official surnamed Jeon was also placed under investigation by the Seoul Southern District Prosecutor’s Office.
Prosecutors believe Geon may have received “hundreds of thousands” of USD “in return for listing several coins” on the Coinone platform.
Coinone told the same media outlet that it would not discuss matters related to the former employee.
But an unnamed domestic crypto industry insider told the same media outlet:
“Rumours that exchanges get paid to list coins have been around for a long time.”
But legal experts said courts currently do not have the power to impose heavy sentences in such cases. He called for legislative reform.
Other insiders claimed that the exchanges were allowed to exercise too much power – by dictating which coins they list. A lawyer said that in the case of securities trading, domestic providers are bound to obtain approval from regulatory bodies – while no such body intervenes in the case of crypto exchanges.
In response to the Terra ecosystem crash last year, the country’s largest exchanges co-formed DEXA, a self-regulatory body that Immediate Delisting Decision,
Bithumb was also raided in January this year as part of a separate price manipulation investigation.