South Korean authorities have arrested the former chairman of the cryptocurrency exchange Bithumb on suspicion of market manipulation and embezzlement.
According to the local news channel JTBC, Kang Jong-Hyun was charged with conspiring with a business partner to manipulate stock prices and steal 60 billion won ($49 million) from his firm.
According to financial news source Yonhap Infomax, the Seoul Southern District Prosecutor’s Office had requested the arrest of Kang and two executives, including his younger sister, of firms connected to Bithumb last month.
According to JTBC, prosecutors think Kang owned affiliates of Bithumb and contributed to raising the stock prices of these businesses by sharing positive news with the market.
Kang Ji-Yeon, the younger sister of Kang, serves as the CEO of the Bithumb-affiliated firms Inbiogen and Bucket Studio, both of which are publicly traded.
Kang has refuted the claims, claiming that he no longer had shares in the alleged firms.
The latest arrest has nothing to do with a separate investigation into potential tax avoidance at Bithumb, which Yonhap reported on last month.
Bithumb, one of the few Korean cryptocurrency exchanges to have endured a crackdown in 2021, has seen a constant series of legal troubles over the past few years.
Another former chairman, Lee Jung-Hoon, was cleared of charges of exchange fraud last month.