In the midst of a continuing investigation into market manipulation and insider trading at the cryptocurrency exchange Bithumb, a South Korean court has granted bail to Won Young-sik, a prominent media mogul and business executive.
Won Young-sik, formerly the CEO of Chorokbaem Group, the parent company of Chorokbaem Media, has been at the center of this high-profile case. Chorokbaem Media is renowned in South Korea for its production of hit Korean dramas like “The Penthouse” and popular variety TV shows such as “K-pop Star.”
The court ordered Won to pay a deposit of $232,000 and wear an electronic monitoring device. Additionally, he has been prohibited from leaving the country, tampering with evidence, or communicating with anyone involved in the investigation. Failure to attend future court hearings would result in his return to custody.
This legal saga began last year when allegations of misconduct at Bithumb, South Korea’s second-largest cryptocurrency exchange by trading volume, emerged. An exposé in September 2022 claimed that Kang Jong-hyun, a mysterious businessman, was the true owner of Bithumb, controlling shares through various firms.
Prosecutors suspect that Kang used his influence to manipulate stock prices for these companies, all of which are listed on the KOSDAQ exchange. The initial investigation in October 2022 expanded to include other celebrities, including the husband of a “first generation” K-pop star, as potential participants in market manipulation.
Furthermore, prosecutors believe Kang may have manipulated cryptocurrency markets by allegedly bribing former Bithumb officials to list coins on the platform, artificially inflating prices. This strategy purportedly allowed a select group of cryptocurrency traders to profit significantly from their investments.
The legal entanglement also involves Kang’s former girlfriend, actress Park Min Young, whose older sister was placed in an executive position at a Bithumb affiliate firm by Kang. Experts in the media industry suggest that Kang’s ties to Chorokbaem Media influenced Park’s decision to sign with Hook Entertainment, a subsidiary of Chorokbaem.
Prosecutors claim that Won and Kang utilized convertible bond call options held by Bithumb affiliates Vidente and Bucket Studio. These options were allegedly executed between December 2021 and July 2022 for companies owned by Won’s children, causing market disruptions amounting to over $45 million.
Won is also accused of using undisclosed insider information related to Chorokbaem Group to grant convertible bond call options to his child’s company, resulting in alleged “unfair profits” of $1.9 million due to subsequent stock price increases.
Despite the legal turmoil surrounding Bithumb, the cryptocurrency exchange has made a comeback of sorts, narrowing the gap with its main rival Upbit. This resurgence is partly attributed to the introduction of commission-free trading. Bithumb is also exploring the possibility of becoming the first publicly listed cryptocurrency exchange in South Korea by listing on KOSDAQ.
