Prosecutors Raid Bithumb in Investigation Over Former CEO’s Alleged Fund Misuse

Highlights:

• Prosecutors raided Bithumb over claims of fund misuse involving former CEO Kim Dae-sik.
• Bithumb is facing new allegations that projects paid high fees to get listed on the exchange and Upbit.
• Bithumb is pushing ahead with IPO plans despite legal troubles and a sharp revenue drop in the past year.

South Korean prosecutors raided the headquarters of crypto exchange Bithumb for what they claim is financial misconduct by its former CEO. The Seoul Southern District Prosecutors’ Office carried out the raid at Bithumb’s offices in Yeoksam Dong. The raid on Bithumb by prosecutors follows claims that former CEO Kim Dae Sik used company funds to buy an apartment in the Seongsu Dong area of Seoul.

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🇰🇷👮‍♂️ South Korean law enforcement officials raided Bithumb's headquarters, investigating allegations that the company used funds to buy a former CEO's personal apartment. daum

Previously: South Korea's regulator has banned new #Upbit users from depositing and withdrawing funds… pic.twitter.com/BGBXpFgXFI

— CryptOpus (@ImCryptOpus) March 20, 2025

Prosecutors are investigating whether Bithumb gave Kim a 3 billion Korean won lease deposit, which amounts to over $2 million. They suspect that he may have spent some of the funds on personal property.

The Financial Supervisory Service previously investigated the matter and later handed their findings to prosecutors. Bithumb confirmed that Kim, who now serves as an adviser to the firm, did repay the apartment-related funds in full after obtaining a loan from a lender. While Bithumb admitted to some aspects of the allegations, the company has yet to address all concerns raised by investigators. As of press time, prosecutors have not released an official statement about the next steps or whether they will file charges.

Listing Fee Allegations Surface Amid IPO Preparations

Alongside the apartment allegations, claims have emerged suggesting that Bithumb and fellow exchange Upbit were involved in questionable listing practices. According to reports from Wu Blockchain, two crypto projects claimed that they paid intermediaries $2 million and $10 million, respectively, for listings on Bithumb and Upbit.

SCOOP: Several projects told WuBlockchain that they paid huge intermediary fees to have their tokens listed on South Korea's largest cryptocurrency exchanges, Upbit and Bithumb. The fees were approximately US$10 million and US$2 million respectively. The intermediaries are… pic.twitter.com/PODtooUaYd

— Wu Blockchain (@WuBlockchain) March 20, 2025

The intermediaries allegedly had connections to Upbit’s shareholders and market makers. Furthermore, reports indicate that a few projects paid as much as 3–5% of the total token supply to secure a listing on the exchanges.

Bithumb is proceeding toward an initial public offering. Lee Jae Won, CEO, is reportedly speeding up the IPO timetable. Moreover, the company restructured itself to remove risks to key shareholders. Bithumb has been preparing to go public since 2020 but its plans have been delayed.

Speculation arose that the IPO process was back on track after Bithumb chose an underwriter. The company confirmed the rumors in 2024 when Bithumb Korea set up a non-exchange business unit to support the IPO. Despite the efforts of the company to get its listing, it saw a 57% drop in revenue in 2023. The drop in revenue has put further strain on the company as it seeks to go public.

Industry Impact and Ongoing Scrutiny

Authorities have investigated the company multiple times since 2018 for fraud, illegal fund transfers, and market manipulation. Notably, authorities have raided Bithumb offices numerous times, but they have not publicly published any public reports from the raids.

The scrutiny of Bithumb may also impede the drive to regulate cryptocurrencies for institutional investors in South Korea. It could also hurt investor confidence as Bithumb looks to fulfill its long-term mission of going public on the Nasdaq exchange by mid-2025.

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