[비즈한국] Lee Jung-hoon, former Chairman of the Board at Bithumb Holdings and Bithumb Korea, has been cleared of charges regarding the 110 billion KRW "Bithumb Coin (BXA token)" fraud case. On March 13, the Supreme Court dismissed the prosecution's appeal against Lee's acquittal on charges of fraud related to coin listing. With the legal risks that persisted for about four years now significantly lifted, attention is focused on whether Lee will return to the forefront of Bithumb's management.
On the 13th, the First Division of the Supreme Court (Presiding Justice Noh Kyung-pil) dismissed the appeal filed by the prosecution in February 2024 regarding charges of "violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (fraud)" against Lee, thereby upholding the original verdict. With this, the litigation involving Lee’s alleged coin listing fraud, which had been ongoing since 2021, has concluded with his final acquittal.
Lee, the founder of Bithumb, was accused of defrauding investors of 110 billion KRW by promising to list the BXA token. The case originated from a contract between Lee and Kim Byung-gun, Chairman of BK Medical Group, concerning the acquisition of Bithumb and joint management of the global exchange. The crux of the allegation was that while Lee received 110 billion KRW as a down payment in exchange for promising to list the BXA token during the contract process, he had no actual intent or ability to do so.
Chairman Kim, who signed the contract with Lee, announced in October 2018 that he would acquire a stake in Bithumb Holdings for 350 million USD through the BK Global Consortium (corporate name BTHMB Holdings). However, Kim failed to pay the balance by the deadline and could not recover the initial down payment.
To make matters worse, the BXA token listing was cancelled. Bithumb had announced plans to list the BXA token in January 2019, but failed to do so due to financial regulatory restrictions. The Financial Services Commission had expressed its intent to ban all forms of initial coin offerings (ICOs) and prohibited circumvented listings through overseas entities between 2017 and 2018. Concerned that an unfriendly regulatory environment would disrupt its bank-linked deposit and withdrawal services, Bithumb eventually scrapped the listing attempt.
After losing the down payment and facing uncertainty regarding the coin listing, Chairman Kim sued Lee for fraud. Kim claimed that Lee deceived him by promising, "I will help you generate the acquisition funds by selling the crypto assets after they are listed, and you can become a co-manager by investing just the down payment," thereby obtaining financial gain. When the case was transferred to the prosecution, they indicted Lee without detention in July 2021 and subsequently demanded an 8-year prison sentence during the trial.
However, the Seoul Central District Court, which presided over the first trial, ruled that Lee had not guaranteed the listing of the BXA coin to Chairman Kim. The court concluded that the failure to list the coin was unrelated to Lee's intent or capability. It ruled that there was no evidence proving Lee had promised the listing or intended to fund the acquisition through BXA sales, and therefore, no act of deception could be established. The Seoul High Court, which handled the second trial, also ruled to uphold the acquittal in January 2024, stating, "When evidence is considered as a whole, the original court's decision of acquittal is valid."
While the criminal proceedings surrounding the BXA token listing fraud have concluded, Lee still has unresolved issues. A civil lawsuit for 12 billion KRW in damages filed by Chairman Kim is still ongoing (Related article: Bithumb's Lee Jung-hoon wins damages suit... cleared of coin 'fraud' charges?). The first-instance court for the civil case, sharing the same view as the criminal court, did not recognize Lee’s deceptive behavior, and the losing party, Chairman Kim, has filed an appeal.
Furthermore, the fact that there are people who lost money on BXA tokens while no one was held responsible remains a problem. This is because there are still domestic investors who purchased the BXA tokens sold by Chairman Kim’s side. Previously, the second-instance criminal court remarked, "While the contract between the two sides is insufficient to serve as evidence for fraud, we have given much thought to how to assess the losses suffered by the victims."
Regarding the Supreme Court's dismissal of the appeal, Bithumb stated, "We respect the court's decision. We hope this verdict serves as an opportunity to resolve past misunderstandings. The company will continue to strive to protect market trust and provide a safe trading environment for our customers with a more responsible attitude."
With this verdict clearing Lee of the coin listing fraud charges, interest is growing as to whether he will return to active management. After being acquitted in the first trial, Lee was registered as a director at Bithumb Holdings in October 2023. At the same time, Bithumb announced its goal of an Initial Public Offering (IPO) in the second half of 2025, and it is now increasingly likely that the company will restart its IPO preparations now that its actual owner is free from legal risks.