South Korean Prosecutors Raid Bithumb HQ as Former CEO Kim Dae-sik Faces Embezzlement Allegations

On March 20, 2025, South Korea’s Seoul Southern District Prosecutor’s Office raided Bithumb’s headquarters. The investigation focuses on allegations that former CEO Kim Dae-sik embezzled 3 billion won (approximately $2 million) in company funds.

Allegations of Misuse of Corporate Funds

Kim Dae-sik, who served as Bithumb's CEO and board member, is now an advisor to the company. According to report from YTN, a South Korean media, Bithumb provided Kim Dae-sik with 3 billion won in 2021 as a full lease deposit for an apartment in Seongsu-dong, Seongdong District, Seoul. Investigators allege that part of these funds was misused by Kim to purchase another private apartment in Seocho District.

The Financial Supervisory Service (FSS) of South Korea had earlier flagged this potential financial misconduct within Bithumb and submitted its findings to the prosecutors' office. The prosecutors are now conducting a compulsory investigation to collect evidence. In response to the allegations, Bithumb stated, as reported by Chosun Ilbo, "Some of the accusations are true. However, Advisor Kim has already taken out a loan from a lender and fully repaid the funds used to purchase the apartment following the FSS investigation."

A History of Financial Scandals

This is not the first time Bithumb has been embroiled in financial controversies. In December 2024, another former CEO of Bithumb, Lee Sang-jun, was arrested and sentenced to two years in prison for his involvement in a bribery and market manipulation scheme. Prosecutors revealed that Lee received over 3 billion won in bribes in exchange for agreeing to list certain altcoins on Bithumb.

Some other top executives at Bithumb have also faced legal charges in the past. Former Bithumb chairman Lee Jung-hoon was accused of fraud involving $70 million related to exchange operations but was acquitted in January 2023. Kang Jong-hyun, widely regarded as the de facto owner of Bithumb, was arrested in February 2023 for manipulating the stock prices of Bithumb affiliates and embezzling company funds.

Allegations of Listing Fees

Adding to the controversy, Wu Blockchain reported on March 20 that multiple project teams claimed they were required to pay $2 million in intermediary fees to list their tokens on Bithumb. In comparison, listing on Upbit, another major South Korean exchange, allegedly costs $10 million or 3%-5% of the project's tokens as intermediary fees. These intermediaries are believed to have connections to Upbit's shareholders or market makers. Upbit has denied these allegations, stating, "Upbit does not charge any fees for token listings. Our listing process is based on a strict internal evaluation system, and intermediaries are not allowed to intervene." However, Bithumb has yet to respond to these claims.

Notably, the recent investgation by prosecutors concides with Bithumb's renewed attempt to pursue an IPO. For Bithumb, repeated scandals risk further damaging its reputation and eroding user trust.

As the investigation unfolds, Bithumb’s ability to address these allegations transparently will be critical in determining its future in the cryptocurrency market.