Former Bitum chair faces 8 years in prison.
Lee Jong-hoon, the former chairman of Bitumb, one of South Korea's major cryptocurrency exchanges, is at the center of a lawsuit and could face up to eight years in prison, but is set for January 18, 2024.
According to Korean local media reports, prosecutors have argued that it was intended to reform Bithumb's management in violation of financial regulations. The case has been ongoing since October 2018, when the former chairman of Bic Group cosmetic surgery company Kim Byung-gun was defrauded of 100 billion won ($70 million) in a deal to acquire Bittem. Prosecutors said Lee knew about the challenges facing BXA's token listing but did not disclose it to Kim. Despite listing issues, Lee accepted the payments without informing Kim of his decision not to list the BXA token.
South Korean prosecutors have asked for an eight-year prison sentence against Lee.
Lee's defense disputes the claims, pointing out discrepancies in Kim's statements and questioning his reliability. Lee insists on Kim's competence to lead Bithumb, expecting Kim to be briefed on the BXA token listing process.
Lee has also faced legal issues related to prosecution for certain economic crimes, particularly fraud.
Related: Bithumb plans to become first crypto exchange listed on Korean stock market: Report
The decision on Lee's ongoing appeal could be a precedent for legal proceedings involving cryptocurrency exchanges and governance. This development coincides with Bitumb's preparation for an initial public offering on Kosdaq in 2025.
The outcome of the appeal will greatly affect the future of Bithum and the fate of BXA tokens. The conviction will trigger a reassessment of governance frameworks in cryptocurrency exchanges, including increased regulatory oversight.
As the cryptocurrency community and investors await the outcome of the appeal, the case highlights the changing nature of the industry and the need for well-defined regulatory frameworks to address governance issues and maintain trust among investors and stakeholders.
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