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South Korean Biz Exec Bailed as ‘Bithumb Market Manipulation’ Probe Continues

Tim Alper
Last updated: | 2 min read
A half-opened set of steel handcuffs against the background of the South Korean flag
Source: Global Image Archive/Adobe

A South Korean court has released a media mogul and business executive on bail as a probe into market manipulation and insider trading at the crypto exchange Bithumb continues.

The executive, Won Young-sik, is the former CEO of Chorokbaem Group, the parent firm of Chorokbaem Media.

The latter is one of South Korea’s most notable production companies.

The firm is responsible for hit Korean dramas such as The Penthouse and variety TV titles like K-pop Star.

Per KBS News, Won was ordered to pay a deposit of $232,000 and wear an electronic tag.

The court has also forbidden Won from leaving the country, destroying evidence, and contacting anyone concerned with the probe.

The court also told Won that he would be taken back into custody if he failed to attend further court hearings.

Won Young-sik outside a South Korean court.
Won Young-sik ahead of a court hearing earlier this year. (Source: SBS/YouTube)

Bithumb Probe Continues

Last year, Won found himself embroiled in allegations of wrong-doings at Bithumb, South Korea’s second-biggest exchange by trading volume.

An exposé published in September 2022 alleged that a mysterious and elusive businessman named Kang Jong-hyun was the true owner of Bithumb.

Kang allegedly owns controlling shares of several firms with minority stakes in Bithumb.

Prosecutors think that Kang used his position to manipulate the stock market prices of some of these firms, which are listed on the KOSDAQ exchange.

They launched an initial probe in October 2022, with the net later widening to more celebrities, including the golf pro husband of a “first generation” K-pop star.

Prosecutors: Stock, Crypto Markets Have Been Manipulated

Prosecutors also think Kang may have manipulated crypto markets by bribing ex-Bithumb officials to list coins on the platform.

This, they claim, helped artificially spike prices, allowing a small group of crypto traders to make a fast profit on their coins.

The long-running legal saga also involves Kang’s former girlfriend, the actress Park Min Young.

Kang installed Park’s older sister in an executive role at one of the Bithumb affiliate firms.

Media experts have claimed that Kang’s involvement with Chorokbaem Media led Park to sign with the talent agency Hook Entertainment, a Chorokbaem subsidiary.

What Was Business Exec’s Alleged Role in ‘Crypto Exchange Scandal?’

Prosecutors allege that Won and Kang used convertible bond call options held by the Bithumb affiliates Vidente and Bucket Studio.

A graph showing Vidente share prices on the KOSDAQ exchange over the past 10 years.
Vidente share prices over the past 10 years. (Source: KOSDAQ/Naver)

Prosecution officials claim that the options were executed between December 2021 to July 2022 for companies operated by Won’s children.

This, prosecutors claim, may have disrupted markets to the tune of over $45 million.

Won is also accused of using undisclosed insider information about Chorokbaem Group to grant convertible bond call options to his child’s company.

Officials think this helped Won and others raise $1.9 million “in unfair profits” due to a subsequent rise in stock prices.

Despite the legal furor surrounding the exchange, Bithumb has seen its fortunes improve of late.

The platform has clawed back some of the ground it had lost to its biggest rival Upbit, thanks to the launch of commission-free trading.

A graph showing trading volumes on the Bithumb crypto exchange over the past 12 months.
Trading volumes on the Bithumb crypto exchange over the past 12 months. (Source: CoinGecko)

Bithumb is also hoping to list on KOSDAQ, becoming the nation’s first and only publicly listed crypto exchange.