Bithumb’s Former CEO Accused of Misusing $2M Lease Deposit as Prosecutors Raid Exchange

South Korean prosecutors have launched a probe into cryptocurrency exchange Bithumb, alleging that its former CEO, Kim Dae-sik, misused company funds to acquire an apartment. Authorities conducted a raid on the exchange’s offices on March 20 as part of the ongoing investigation.

Allegations of Embezzlement and Apartment Purchase

The inquiry centers on claims that Bithumb allocated a 3 billion Korean won (over $2 million) lease deposit to Kim, who previously served as CEO and board member before taking on an advisory role. Prosecutors suspect that a portion of these funds was redirected for personal property investment.

Bithumb has confirmed that while some of the allegations hold merit, Kim promptly repaid the funds after securing a loan. The Financial Supervisory Service (FSS) had previously flagged these financial irregularities and referred the case to prosecutors.

IPO Push Amid Legal Scrutiny

The timing of the probe coincides with Bithumb’s renewed efforts to go public. Reports indicate that CEO Lee Jae-won is fast-tracking the company’s IPO process by addressing legal concerns tied to major shareholders.

The exchange has faced multiple legal and financial hurdles in its IPO journey, dating back to 2020. While it selected an underwriter in 2023, paving the way for a public listing, recent financial reports revealed a staggering 57% drop in revenue for 2023.

With Bithumb restructuring to mitigate legal risks and South Korea’s Supreme Court clearing former board chairman Lee Jeong-hoon of fraud charges, the exchange is aiming for an IPO launch in 2025. However, the latest investigation could introduce new uncertainties into its long-awaited stock market debut.