South Korean Media Mogul Released on Bail Amid Ongoing Bithumb Market Manipulation Investigation
A prominent South Korean media mogul and business executive, Won Young-sik, has been released on bail as authorities continue their investigation into market manipulation and insider trading at the popular cryptocurrency exchange Bithumb.
Won, the former CEO of Chorokbaem Group, the parent company of Chorokbaem Media, is well-known in South Korea for his involvement in successful production companies. Chorokbaem Media is responsible for producing hit Korean dramas like The Penthouse and popular variety TV shows like K-pop Star.
To secure his release, Won had to pay a deposit of $232,000 and is now required to wear an electronic tag. Furthermore, the court has imposed several restrictions on him, including a ban on leaving the country, destroying evidence, and contacting individuals related to the ongoing investigation. Failure to comply with these conditions may result in his return to custody.
Last year, Won became entangled in allegations of misconduct at Bithumb, the second-largest cryptocurrency exchange in South Korea. An exposé published in September 2022 claimed that a mysterious businessman named Kang Jong-hyun was the true owner of Bithumb, with ownership stakes in various companies linked to the exchange.
Prosecutors suspect that Kang, leveraging his position, manipulated stock market prices for these affiliated firms listed on the KOSDAQ exchange. They also believe that Kang may have influenced cryptocurrency markets by bribing ex-Bithumb officials to list certain coins, artificially inflating their prices and enabling a select group of traders to profit immensely.
This ongoing legal saga also involves Kang’s former girlfriend, actress Park Min Young, as well as her sister, who occupied an executive position in one of the Bithumb affiliate firms. Experts suggest that Kang’s connections to Chorokbaem Media influenced Park’s decision to join the talent agency Hook Entertainment, a subsidiary of Chorokbaem.
Prosecutors have accused Won and Kang of utilizing convertible bond call options held by Bithumb affiliates Vidente and Bucket Studio. They allege that these options were executed between December 2021 and July 2022 for companies linked to Won’s children, potentially disrupting markets to the tune of over $45 million. Additionally, Won is alleged to have used undisclosed insider information pertaining to Chorokbaem Group to grant convertible bond call options to his child’s company, resulting in approximately $1.9 million in unfair profits due to subsequent stock price increases.
Despite the legal challenges faced by Bithumb, the exchange has managed to regain some ground against its main rival, Upbit, following the introduction of commission-free trading. In fact, Bithumb is now striving to become the nation’s first publicly listed cryptocurrency exchange on the KOSDAQ.