Bithumb, one of the largest cryptocurrency exchanges in South Korea, has reportedly been raided by Seoul police in connection with suspected investment fraud related to the issuance of a BXA token.
According to the reports by Seoul Shinmun, Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit officers conducted search and seizure investigations at the exchange’s headquarters in the Gangnam District on 2nd September.
This was linked to a $25 million token sale hosted by Bithumb and to the proposed acquisition of the Singapore Platform, BTHMB. But the deal that was originally expected to be completed in February never materialized. Bithumb Chairman Lee Jung Hoon is also known to have been in police investigation on charges of fraud and escaping property.
The exchange was accused of pre-selling native BXA tokens, but the failure to list caused substantial losses worth millions to investors who participated in the sale.
This news follows the seizure of the third-largest cryptocurrency exchange in the country, Coinbit, on allegations of fake trading volumes, a major concern that has haunted the industry for quite some time.
The original reports claimed that the platform’s owner Choi Mo and other executives allegedly used ghost accounts to execute fake trades to artificially inflate the trading volume. The local authorities alleged that the wash trading at the platform had produced more than $84 million in faked income.
In a bid to provide a framework for the regulation and legalization of cryptocurrencies as well as crypto-exchanges, South Korea became the world’s first country to pass a comprehensive set of cryptocurrency rules in March this year
While this has been a recent development, the country has been known to be at the forefront of the cryptocurrency and blockchain movement over the past decade. Two years earlier, Seoul’s mayor, Park Won-soon even discussed the capital city’s plans to launch what was dubbed the S-coin for the purpose of a payment method for city-funded welfare programs.