Cryptocurrency exchange Bithumb is under investigation by the Seoul Southern District Prosecutor’s Office’s Financial Investigation Division 2 for listing tokens in exchange for money. The investigation follows a similar case involving Coinone, which was investigated last month for the same reason.
The investigation of Bithumb came after an employee of its parent company, Bithumb Holdings, named Mr. Lee, was accused of listing a certain token on the exchange in return for money. The prosecution has seized and searched the offices of Bithumb Holdings and Lee’s aunt’s home.
Experts have highlighted the need for the crypto asset industry to improve its systems and strengthen punishments to prevent such practices. The crypto asset industry has long been plagued by controversies over the practice of illegal listing, which involves listing tokens for money.
Other crypto exchanges, such as Upbit, Corbit, and Gopax, are also rumored to be under investigation by the prosecution for illegal listing. Legal and industry experts have called for institutional improvements and stronger penalties to prevent such practices from occurring.
The current maximum sentence for those involved in illegal listing is 2 years and 5 years for the person who gave money and the person who received money, respectively, which is considered weak by some. Lawyer Hong Pureun, representative of D’CENT, a law firm specializing in crypto assets, said that strengthened regulations are needed, and the Basic Law on Digital Assets, currently being discussed in the National Assembly, could provide a solution.
There are also calls for the division of authority in the cryptocurrency exchange industry, similar to the stock market. In the stock market, various institutions such as the Korea Exchange and the Korea Securities Depository are responsible for listing and deposit protection. In contrast, crypto exchanges have all these functions, which some experts believe gives them too much power.
The investigation of Bithumb and Coinone for illegal listing has raised concerns about the wider crypto asset industry. However, it has also highlighted the need for systemic improvements and stronger punishments to ensure the integrity and stability of the industry.
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This article was republished from azcoinnews.com