South Korean National Tax Service agency investigates Bithumb

According to cointelegraph.com, the National Tax Service (NTS) raided the exchange’s headquarters in the country’s capital city, Seoul, as a part of a compliance investigation. Authorities are looking into the domestic and international transactions of Bithumb Korea, Bithumb Holdings and its affiliates in the context of tax evasion, but they are also looking into potential tax evasion related to the ownership of Bithumb. 

The investigation was carried out by the 4th Bureau of Investigation of the Seoul Regional Tax Service, which usually handles special tax cases. Bithumb Korea was previously investigated and fined nearly USD 28 million for back taxes, but the company was not found guilty of tax evasion at the time.

Bithumb’s former chair was on trial for fraud 

In January 2023, Bithumb former chair Lee Jung-hoon was found not guilty by the 34th Division of the Criminal Agreement of the Seoul Central District Court after he was put on trial under accusations of violating the Act on the Aggravated Punishment Of Specific Economic Crimes due to fraud. 

According to cointelegraph.com, the case has been ongoing since 2018, when the former chairman was accused of defrauding around USD 70 million while he was negotiating  the acquisition of Bithumb. Just a week before the ruling, Bithumb’s largest shareholder executive, Park Mo, was found dead after he was accused of embezzlement and manipulation of stock prices. 

The Financial Investigation Division of the Seoul Southern District Prosecutor’s Office launched an investigation into allegations made against Park Mo in October 2021. Eventually, this led to the seizing of Bithumb-affiliated companies such as Vident, Inbiogen, and Bucket Studio. 

Bithumb was also raided in 2022

In July 2022, Bithumb was raided by South Korean authorities alongside 15 other entities linked to the collapse of Terra. Back then, reports surfaced that the Joint Financial and Securities Crime Investigation Team of the Seoul Southern District Prosecutors Office raided the offices of Upbit, Bithumb, Coinone, Korbit and Gopax as well as other businesses connected to the collapse of Terra. 

Following the raid, authorities reportedly obtained data related to TerraUSD (formerly UST) and Terra (LUNA) transactions that inflicted losses to around 200,000 Korean investors in the wake of the May crash.