Officers from the Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit raided Bithumb’s headquarters on Wednesday 2 September, according to the Seoul Newspaper.
Bithumb is one of South Korea’s biggest cryptocurrency exchanges by trading volume, at over $365 million, according to CoinGecko.
Furthermore, police also arrested Lee Jung Hoon, chairman of Bithumb Holdings and Bithumb Korea, according to press reports. This comes after a previous investigation into Lee for trying to transfer some of his assets abroad without reporting it.
The raid was related to the sale of a $25 million in tokens on the exchange in 2018. The sale included a proposed acquisition by a Singapore platform, BTHMB, that never materialised, according to Coindesk.
Meanwhile, CoinTelegraph clarified that the alleged economic fraud involved the token known as BXA. The token was purportedly promoted as Bithumb’s native token, which eventually turned out to be involved in high-scale fraud. The fraud caused investor damages of 30 billion won ($25 million).
In related news, Decrypt reported that Seoul police also raided last week the offices of Korean cryptocurrency exchange Coinbit due to its management falsifying 99% of its trading volumes.
Some investors said they lost millions participating in the sale, The News reported.