Law enforcement agencies of South Korea came to search the office of the largest South Korean cryptocurrency exchange Bithumb.
It is reported by the local newspaper Seoul Shinmun, referring to the Seoul government. The exchange has caught the attention of police over an incident related to the listing of the Blockchain Exchange Alliance (BXA) token.
The exchange reportedly held a presale of $25 million tokens, but never added BXA to the listing.
The incident took place back in November 2019, however, the actual investigative actions against Bithumb did not begin until September 2.
In early 2019, the holding company Blockchain Industries signed an agreement of intent to merge with Bithumb no later than March 1, 2019.
The plan was to create a new venture called the Blockchain Exchange Alliance (BXA), as well as a subsequent listing on the NASDAQ New York Stock Exchange.
At the end of 2019, BXA entered the final stage of buying Bithumb.
Money in the morning, chairs in the evening
It was reported that as a result of the takeover, Bithumb was supposed to host the BXA token, and also use it as its own token for global payments on its platform.
With the help of a closed ICO, the exchange raised $25 million for the token even before the acquisition, but the BXA token itself was never added to the listing. It is reported that the failure to place the BXA token on Bithumb was associated with underpayment by BTHMB as part of the exchange takeover.
At the time of this writing, the police have sealed the Bithumb office and also seized all computer equipment. The head of Bithumb Lee Jong Hoon, according to the South Korean law enforcement agencies, is a key person involved.
A year of bad luck
This is not the first time that Bithumb has come under the spotlight of the Korean authorities. In June 2019, the exchange was found guilty of violating the necessary measures to protect personal information, which led to the leakage of 31,000 user personal data in 2017.
In March of that year, over a million EOS were stolen from Bithumb via a digital wallet. The ongoing litigation could hit Bithumb’s business hard with South Korea recently ranked among the top cryptocurrency regulatory countries by the Financial Action Task Force (FATF) standards.