While South Korean cryptocurrency exchange Bithumb attempts to prepare for its long-awaited initial public offering, prosecutors from the Seoul Southern District Prosecutors’ Office have launched an investigation into alleged embezzlement by former CEO Kim Dae-sik. The investigation centers on the potential misuse of approximately 3 billion KRW ($2-2.3 million), specifically a lease deposit that may have been improperly directed toward an apartment in Seongsu-dong located in Seoul. The investigation is prompting authorities to raid the exchange’s headquarters in Yeoksam-dong.
The Financial Supervisory Service initially examined these allegations before transferring their findings to prosecutors, who are now conducting a thorough investigation into the financial irregularities that could potentially impact Bithumb’s planned 2025 IPO. Bithumb has acknowledged certain aspects of the allegations while emphasizing that Kim has fully repaid the allegedly misappropriated funds after securing an external loan following the FSS inquiry, suggesting that the company suffered no permanent financial losses despite the alleged misconduct.
Beyond the embezzlement allegations, industry rumors have emerged regarding excessive token listing fees at major Korean exchanges including Bithumb and Upbit. External parties reportedly charge between $2 million and $10 million to facilitate listings, raising significant concerns about market fairness and transparency. These intermediaries allegedly maintain connections with exchange shareholders, potentially compromising the objectivity of the token evaluation process. The exchange recently expanded its offerings by adding Bubble Maps to its KRW market on March 18, 2025.
Bithumb’s IPO ambitions, which date back to 2020, have faced numerous obstacles including regulatory hurdles and legal challenges associated with its corporate governance structure. The exchange recently experienced a 57% decline in annual revenue for 2023, further complicating its public offering aspirations despite naming Samsung Securities as lead underwriter for the planned listing.
This investigation represents the latest in a series of regulatory challenges for Bithumb, which had previously gained momentum following the acquittal of former chairman Lee Jeong-hoon on fraud charges by South Korea’s Supreme Court. The ongoing probe highlights persistent concerns regarding corporate governance standards within South Korea’s cryptocurrency sector, with regulatory authorities maintaining close scrutiny of exchange operations and financial practices. If found guilty of financial misconduct, Bithumb executives could face severe penalties including potential tax audits triggered by the alleged financial irregularities.
