A local publication in Seoul reported that Bithumb was under police investigation after the exchange has been linked to an economic fraud involving a pre-sale of BXA tokens, which purportedly promoted as Bithumb’s native token in 2018. The platform abruptly issued them ahead of the planned acquisition by Singapore-based blockchain consortium BK Global but failed to list them when the deal fell through, which eventually caused investor damages of $25 million.
After reports from investors who lose millions in participating in the said trade reached authorities, Seoul Metropolitan Police Agency's Intelligent Crime Investigation Unit officers conducted search and seizure investigations at Bithumb’s headquarters in the Gangnam District on Tuesday. Cointelegraph added that the latest checks are allegedly connected with an ongoing police investigation involving Lee Jung Hoon, chairman of the board at Bithumb Korea, and Bithumb Holdings.
Coindesk shared that just last week, the country's third-largest exchange, Coinbit, has been seized by Seoul authorities on allegations it had faked most of its trading volumes.
MakerDAO's Head of Business Development in Asia, Doo Wan Nam, told Decrypt that this was not the first time a South Korean exchange faced accusations of fraudulent activities. With crypto regulations soon to enter the market, he noted that there would be more crackdowns in the country. He added that this might push for stricter legislation imposed on crypto-related business in the country.