The largest Korean cryptocurrency exchange Bithumb has reportedly been seized by the Seoul Metropolitan Police Agency for alleged fraud.
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According to Korean news outlet, the Seoul Shinmun, the law enforcement investigate a pre-selling of BXA tokens worth approximately $25 million in which the exchange declined to list the asset and led to losses to investors.
The pre-sale is linked to an agreement dated as of October 2018, when Singapore-based BK Global Consortium had signed a deal to buy a majority share of BTC Holding Co. which is Bithumb's largest investor.
The plan was to form a new publicly traded entity called the Blockchain Exchange Alliance (BXA) — with the BXA token listed on the exchange — that eventually had to be listed on NASDAQ.
However, in November 2019, the alliance shifted in payment responsibilities that had led BXA Token to collapse in value.
As a result of the raid, the Seoul Metropolitan Police Agency's Intelligent Crime Investigation Unit has confiscated computers from the headquarters of Bithumb in Gangnam-gu, Seoul.
Bithumb Head Lee Jung Hoon is also under police investigation for fraud.
In June this year, Bithumb was planning to go public. Samsung Securities, a company specializing in capital markets, had reportedly been chosen by Bithumb to organize its IPO.
It remains unknown whether the exchange will proceed with its initial plans under the current circumstances.
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