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The criminal trial of the former CEO of the major South Korean cryptocurrency exchange Bithumb began on Wednesday. The trial began in the Seoul Eastern District Court where Lee Jung Hoon, the former CEO of Bithumb, is being accused of embezzlement and deceiving customers. He has been charged with embezzlement and fraud to the tune of 22.7 billion won ($19.72 million).
Prosecutors claim that Lee embezzled 22.7 billion won by operating Bithumb in such a way that customers could not make withdrawals, transferring customer funds to his own accounts, and by diverting customers to invest in other ventures that resulted in losses. The prosecution also accused Lee of deceiving customers by not making public the true value of coins listed on the exchange.
Lee’s defense denied the charges, claiming that the funds were not embezzled, but rather used as investments in blockchain businesses. However, prosecutors contend that Lee was not transparent in his activities and that customers were unaware of their investment losses. The trial is ongoing and is expected to continue throughout the year. If convicted, Lee will face up to a five-year prison sentence.