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South Korean prosecutors are going hard on an eight-year sentence for Lee Jung-hoon, the former chairman of crypto exchange platform Bithumb, for an alleged $70 million fraud.

According to Yonhap’s report, authorities alleged that Lee had defrauded Kim Byung Gun, the chairman of Singapore-based BK Group, in a failed attempt to acquire Bithumb earlier in 2018.

The Saga

As contained in the report, Lee convinced Kim to issue Bithumb Coin (BXA) via the BK Group-affiliated Blockchain Exchange Alliance, assuring that BXA would be listed on Bithumb.

Thereafter, Kim used some of the proceeds from the BXA presale, about $25 million, to purchase his stake in Bithumb.

The token was later sold to numerous other investors, accumulating approximately $45 million in sales.

Unfortunately, Bithumb did not eventually list BXA on its platform, resulting in Kim’s acquisition of Bithumb failing and causing other investors to suffer great losses.

According to prosecutors, Lee had no intention of listing the token as it was part of his plan to defraud his partner.

The affected investors sued both Lee and Kim for fraud.

But South Korea’s investigative agency concluded that Kim was also a victim, just like the other investors involved in the BXA token sale.

How’ve, prosecutors are going hard on Lee to be convicted of fraud based on South Korea’s Act on the Aggravated Punishment of Specific Economic Crimes.

Meanwhile, Lee’s sentencing hearing is scheduled for December 20.

How Large is this Damage

As in a hearing before the Seoul Central District Court, prosecutors opined that “the amount of damage is very large, and the damage is especially great for ordinary coin investors.”

Lee’s attorney, however, claimed that the token sale was “faithfully” carried out according to the usual procedure.

“The structure of this case is a typical stock sale contract. The negotiation took place for 90 days,” the lawyer said.

The attorney further argued that BK Group’s Kim sued Lee to exenorate himself from the complete failure of the BXA token sale.

Lee Apologizes

As per Lee’s statement, he apologized for his actions, saying:

“Bithumb was the number one exchange in Korea at the time of sale. I am very sorry for making it difficult for employees and causing social pressure.”

Meanwhile, FTX previously revealed plans to acquire Bithumb as part of its expansion plan amid the ongoing crypto winter.

It remains faint if the company will proceed with it plans even with the recent development.

By Meekness Nnoka

Blockchain Analyst & Writer with top-notch Technological background. Enjoys reading and writing fascinating crypto contents. 4 years content creating experience.

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