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The South Korean police have formally named Bithumb CEO Lee Jae-won as a suspect in their ongoing bribery investigation, mentioning that the CEO hired the son of an independent lawmaker as a political favor.
The development is part of a series of charges and fines aimed at the exchange, leaving it managing one crisis after the other since the beginning of 2026.
As a show of trust, the board is expected to reappoint Lee to a new two-year term, betting on continuity over change. That, however, looks less likely now that he has been made a suspect.
What did the Seoul police say about Bithumb’s CEO?
The Seoul Metropolitan Police Agency’s Public Crime Investigation Unit announced that it has begun investigating Bithumb CEO Lee Jae-won today. They believe that the CEO exercised his power unlawfully by giving the son of an independent lawmaker a job at Bithumb after a meeting held at a restaurant in Seoul’s Mapo district back in November.
The information was leaked by a former aide who worked for Kim, and led the police to believe that the decision was made within two months after the meeting between the two parties.
This then led the police to believe that the hiring was linked to Kim being a member of the National Assembly’s Political Affairs Committee, which oversees the Financial Services Commission in South Korea.
The police also believe that Kim made use of his committee seat to challenge Dunamu, who is in charge of the rival exchange Upbit. Additionally, there was also a former staff member who was hired in September 2025 as an advisor who investigators think might be connected to the current issue.
How does this connect to Bithumb’s other issues?
This new case joins the list of cases stacked against the exchange this year. In March, the South Korean Financial Intelligence unit issued a six-month partial suspension and a fine of $24.2 million after failing to meet anti-money laundering requirements. Bithumb appealed the suspension and got it temporarily blocked, but it’s still not lifted.
Before that though, in February, an error made by a staff member led to around 620,000 Bitcoins being accidentally sent to users.
While Bithumb claims to have found out and addressed the issue within 35 minutes, the incident raised bigger concerns about how the exchange manages its internal systems. This led to regulators introducing stricter checks for all South Korean crypto platforms.
Why is South Korea’s crypto industry facing legal issues?
Holding an executive position in South Korea’s crypto space seems like an extreme sport at the moment. The Bithumb CEO before Lee was convicted for taking bribes to list certain projects and was jailed for two years following investigations.
Upbit CEO Lee Sirgoo left his role in 2025 after the exchange was reprimanded over its own anti-money laundering failure.
A major reason Lee has been able to stay this long at Bithumb is due to a gap in South Korea’s law, which does not recognize crypto exchanges as financial institutions and, as such, does not require the CEO to step down after regulatory issues.
This gap looks to be covered soon as South Korea tightens its crypto industry rules and regulations.
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