South Korea’s leading cryptocurrency exchange Bithumb has reportedly come under fire following a raid by the Korean Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit on account of an alleged crypto-related fraud scheme.
According to reports from local media today, Bithumb allegedly sold BXA tokens to investors on its platform, only for the exchange to end up not listing the cryptocurrency, which is usually the case for most exchanges after a token sale.
The presale saw investors buying about 30 billion won (~$25 million) worth of BXA tokens, but Bithumb’s failure to list the cryptocurrency after the presale reportedly made investors who bought the tokens to make losses.
The BXA tokens were reportedly issued as part of Bithumb’s acquisition by Singapore-based company BK Group. However, the deal didn’t pull through.
BK Global could not meet up with payment terms and conditions after making a deposit payment of $100 million and expected to complete payments in September 2018 as the deadline for payment.
According to the report, the law enforcement agency has confiscated Bithumb, and a search is ongoing at the Bithumb headquarters located in Gangnam-gu, Seoul, to gather relevant pieces of information concerning the charges labeled against the exchange.
Bithumb’s chairman, Lee Jung-hoon, has since been taken under police custody and is being interrogated for the escape of property abroad and fraud, which is a crime against the law and attracts punishment for some economic violations.