South Korean Authorities Launch Raids on UpBit and Bithumb

Reports have emerged stating that South Korean prosecutors have conducted raids on the offices of the country’s two leading cryptocurrency exchanges, Upbit and Bithumb. The raids are part of an ongoing investigation involving Kim Nam-kuk, a politician who faced public scrutiny over allegations of acquiring 800,000 Wemix tokens without adhering to the necessary regulations. The authorities suspect that the platforms may have somehow been involved in the transfer of the coins from Bithumb to Upbit last year.

To unravel the case involving Kim Nam-kuk, local media outlets reported that Korean authorities searched the headquarters of Upbit and Bithumb in Seoul. Recently, the Democratic Party (DP) urged Nam-kuk to sell his 800,000 Wemix coins amid accusations of potentially using insider information to accumulate them a few years ago. It is alleged that Nam-kuk withdrew the assets at the beginning of 2022, several months before the enforcement of legislation requiring cryptocurrency entities to report personal information for transfers exceeding $758. Notably, Nam-kuk was part of the team that proposed a delay in the income taxation on digital assets in South Korea. He has now stated his intention to sell the holdings, which are currently valued at approximately $660,000, in compliance with the DP’s recommendation.

Wu Blockchain argued that Nam-kuk’s transfer of 800,000 Wemix coins from Bithumb to Upbit in 2022 may have sparked the investigation against the exchanges. Upbit deemed the transaction “improper” and reported it to the government at that time. In January, Korean prosecutors raided Bithumb’s offices following rumors of price manipulation of an undisclosed coin listed on the platform. The authorities clarified that the raid aimed to secure transaction details for a specific coin and had no direct connection to Bithumb itself.

The recent inspection comes shortly after prosecutors sought an arrest warrant for Kang Jong-Hyun, the owner of Bithumb, on charges of embezzlement and market manipulation. Jong-Hyun’s sister also encountered legal issues, as the Seoul Southern District Prosecutor’s Office claimed she artificially inflated the share price of certain firms through the issuance of convertible bonds.

Despite being one of the largest cryptocurrency exchanges in South Korea, Bithumb has faced various controversies over the years. In December 2022, Park Mo, the largest shareholder of Bithumb Holdings Co., was found dead in front of his house in southern Seoul. Although initial investigations suggested suicide and found no signs of violence, the crypto community raised doubts. Mo was closely associated with Jong-Hyun and his sister and had supposedly discussed the potential purchase of his organization by the now-bankrupt FTX.

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