Bithumb's top execs face lawsuit in Hong Kong for fraud
Bithumb's Hong Kong subsidiaries are facing a civil suit for breach of contract, while their top executives are facing criminal charges of fraud.
The accusations were made by the cryptocurrency exchange
operator's previous partner in Thailand, which took separate legal action in
Korea last September against executives and major shareholders here, after the
company unilaterally halted its business in Thailand.
A representative of the former partner in Thailand told The
Korea Times that lawyer Kevin Lee from the Hong Kong firm, Prince's Chambers,
has been hired for his company's legal battle in Hong Kong. The lawsuits will
be filed this month.
The former Thai partner decided to sue Bithumb's Hong Kong
subsidiaries ― Bithumb Global Holdings (BGH) and GBEX ― and their top
executives, after it discovered they were involved in the plan to open a
Bithumb exchange in Thailand. Some of the executives of these subsidiaries also
hold high-level positions in Bithumb Korea, according to the plaintiff.
In 2017, Bithumb announced that it would recruit overseas
partners to establish cryptocurrency exchanges in their countries by forming
joint ventures. Its plan was reported by several news outlets at the time.
Although Bithumb founded entities in Thailand and Japan in 2018, efforts to
open exchanges in these countries were in vain.
The former Thai partner is claiming that Bithumb's sincerity
is in question as the operator seems to have had no true intention to establish
an exchange in Thailand. It alleges the company made empty promises from the
start, simply to sell BXA coins by exaggerating the firms overseas presence.
The BXA coin was a virtual asset issued by BK Group Chairman
Kim Byung-gun, who once attempted to take over Bithumb. After Kim gave up that
plan due to financial concerns, and BXA failed to be listed on Bithumb, those
who bought the coins on expectations over the acquisition sued him and Bithumb
board Chairman Lee Jung-hoon, who is regarded as the de facto owner of the
company.
"After Bithumb stopped its BXA coin business, its Thai
operation became unnecessary, so the company ended its business in Thailand
unilaterally, causing serious damage to us," the former Thai partner said.
"BGH and GBEX collectively own a 49-percent stake in the joint venture in
Thailand, and are wholly-owned subsidiaries of Bithumb Korea, so we sued
Bithumb Korea's executives last year and decided recently to file lawsuits in
Hong Kong against the Hong Kong subsidiaries and their executives, who are
related to this issue more directly."
The fact that the criminal suit in Korea has been pending at
Suseo Police Station in Seoul over the past nine months was another reason for
its decision to take legal action in Hong Kong.
"We have yet to receive any response from the
police," Kwon O-hoon of law firm Cha & Kwon, who represents the
plaintiff, said. He added that the case has not been brought to court yet.
A separate lawsuit could be filed, "in the near
future," by the cryptocurrency exchange operator's former partner in
Japan, according to the Thailand partner.
When contacted for comment concerning the company's legal
battle over the foundered joint venture in Thailand, Bithumb Korea's
spokesperson had not responded as of July 6.
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