As per the latest reports, Lee Sang-jun, the CEO of Bithumb, a major South Korean digital currency platform, is under investigation by law enforcement agencies. The allegations against him suggest that he may have participated in a bribery scheme, receiving payments in exchange for adding certain digital currencies to the Bithumb trading platform.
The Seoul Southern District Prosecutors’ Office has initiated a probe to discover the exact extent of Bithumb CEO Lee’s Sang-participation jun as officials dig further into claims of misbehaviour. A police raid was recently undertaken on Lee’s private house and Bithumb’s office complex to gather any papers that might give insight into probable crime.
Bithumb and Coinone in bribery probe
Coinone, another South Korean exchange, is also being investigated over claims against a former employee who allegedly took bribes to list particular tokens on the site. These allegations are pretty similar to those that are being examined about Bithumb. The prosecution has not disclosed the former workers’ identity, citing the South Korean rules protecting personal information.
A local media outlet, Chosun Biz, has recently reported that the investigation into the bribery scandal involving token listings has widened to encompass multiple other major digital currency exchanges in South Korea. The report reveals that law enforcement agencies scrutinise Korbit, Gopax, and Upbit for alleged involvement in illicit token listing activities.
The Digital Asset Exchange Joint Consultative Body (DAXA) comprised influential platforms to oversee South Korea’s digital asset exchange industry. As part of its responsibilities, DAXA ensures exchanges adhere to strict guidelines for token listings. However, the effectiveness of DAXA’s operations has been questioned following the delisting of the native token of game publisher Wemade from four major exchanges. This development has led to doubts about DAXA’s ability to regulate the industry effectively.
New Legal Framework: Digital Asset Basic Act
South Korean authorities have proposed a new regulatory framework to improve digital currency market regulation. Token issuers will be obliged to obtain clearance from financial regulators under the proposed system. This proposal will be included in the upcoming Digital Asset Basic Act, which will serve as a complete regulatory framework for digital currencies and exchanges, with the goal of protecting the interests of all players in this quickly growing field.
The proposed legislation suggests that tokens listed on major exchanges will be exempt from regulatory scrutiny. Despite this, it remains uncertain whether the authority of DAXA will be relinquished.
Due to the collapse of Terra’s ecosystem, authorities took drastic measures to address the issue. These measures included multiple raids on exchange offices and a thorough evaluation of the current legal framework for digital currencies. The collapse of Terra’s ecosystem was the catalyst for these actions, which were deemed necessary to prevent similar incidents in the future.