Bithumb, one of South Korea’s biggest cryptocurrency exchanges, is attempting to disassociate itself from its former chairman amid fears that its links to him may pose a threat to its license to operate.
- In 2018, Lee Jung-hoon, a former chairman and current shareholder of Bithumb, promoted BXA Coin and won investments worth US$26 million by ensuring that the cryptocurrency would be listed on Bithumb — but BXA coin was never listed and Lee was prosecuted for fraud on April 23.
- Under South Korea’s Act on Reporting and Use of Certain Financial Transaction Information, which came into force on March 25, every cryptocurrency exchange operating in the country is required to have a contract with a bank that administers real-name accounts for the exchange’s users. Any exchange that fails to meet that requirement by Sept. 24, 2021, will be shut down.
- In response to the law, the Korean Federation of Banks has listed 16 measures against which crypto exchanges are assessed in order to determine their eligibility to sign such contracts. One of those measures, “a history of embezzlement and fraud involving executives and employees,” constitutes the core of Bithumb users’ concerns over the future of the exchange.