Former Bithumb Chairman Lee Jeong-hoon found himself at the center of a legal battle as the prosecution pushed for an eight-year prison sentence during an appeal hearing held on Nov 18 by the 5th Criminal Division of the Seoul High Court.
Bithumb Chairman’s Alleged Fraud
According to the report, the charges against Lee Jeong-hoon revolve around an alleged fraud worth 110 billion won, with the prosecution arguing that he caused substantial financial damage by deceiving BK Group Chairman Kim Byeong-gun. The prosecution contended that Lee proposed the acquisition and joint management of Bithumb, assuring Kim that he would list BXA (Bithumb Coin) on the platform.
In the first trial, the prosecution sought an eight-year prison term, but the court acquitted Lee, citing a non-binding clause in the investment agreement and the absence of a promise to list the coin. Dissatisfied with the outcome, the prosecution immediately appealed, urging the court to overturn the initial ruling and impose an eight-year sentence, mirroring the original request.
The prosecution asserted that Lee had planned to alter Bithumb’s governance structure to place it under the control of a foreign company, a move aimed at evading financial authority regulations and reaping profits through exchange coins. They claimed that Lee was well aware of the risks associated with this plan and passed them on to the joint underwriter, exploiting a significant information asymmetry.
Furthermore, the prosecution alleged that Lee, despite knowing the realistic difficulties of listing BXA coins, misled Kim by verbally assuring him of the feasibility without explaining the challenges. When these difficulties materialized, Lee purportedly made no effort to overcome them, opting not to list the coins. The prosecution argued that Lee’s acceptance of the second down payment and additional collateral without disclosing the decision not to list the coins constituted intentional deception.
In response, Lee’s defense team countered by highlighting inconsistencies in the victim’s statements. They referred to the original trial court’s skepticism about Chairman Kim’s credibility and pointed to witness statements suggesting Kim initially proposed acquiring Bithumb.
The defense also contested the premise of the indictment related to the listing process, asserting that Kim was aware of the status of BXA Coin’s listing and had inquired about it in messages to a witness in January 2019.
During his final statement, Lee maintained his innocence, stating that he was unaware of the victim’s intention to take over the company through President Lee Sang-jun. He believed in Kim’s ability to lead the company and explained that he had conducted the business transaction in good faith. Lee concluded by emphasizing his compliance as a seller and attributing delays in payment to the buyer.
The court scheduled the next appeal hearing for January 18th next year, marking a continuation of the legal proceedings surrounding the former Bithumb Chairman’s alleged fraudulent activities.