Bithumb raided again over alleged misuse of executive funds

South Korean prosecutors have raided cryptocurrency exchange Bithumb’s headquarters as part of an ongoing investigation into allegations that former and current executives misused company funds allocated for luxury housing.

According to an October 29 report by local media outlet News1 Korea, the Major Crimes Prosecution Division 3 of the Seoul Southern District Public Prosecutors’ Office, led by prosecutor Kim Yong-je, began searching Bithumb’s headquarters in Seoul’s Gangnam district on Thursday morning.

The investigation concerns allegations that Bithumb provided 11.6 billion won in housing benefits to 4 former and current executives, with some of the money suspected of being diverted for personal use.

Authorities are reportedly collecting additional documents and evidence to examine questions that emerged during an earlier investigation into the exchange’s handling of executive housing funds.

The latest search comes roughly 19 months after prosecutors first raided Bithumb’s offices in March 2025 over suspected misuse of corporate money.

Bithumb faces renewed investigation over executive housing funds

The allegations first surfaced in March 2025, when South Korea’s Financial Supervisory Service disclosed that Bithumb had provided luxury residential properties worth a combined 11.6 billion won to 4 former and current executives.

The financial watchdog found suspected irregularities involving the use of housing lease funds, including allegations that some executives had used money intended for company-provided accommodation for private purposes.

Following its findings, the regulator referred the matter to the Seoul Southern District Prosecutors’ Office for further investigation.

Prosecutors subsequently raided Bithumb’s headquarters on March 20, 2025, as they examined whether company funds had been improperly used to help a former chief executive purchase an apartment.

As crypto.news previously reported, the investigation involved former Bithumb CEO Kim Dae-sik, who later served as an adviser to the exchange.

Investigators were examining claims that Bithumb provided Kim with a 3 billion won lease deposit connected to an apartment in Seoul’s Seongsu-dong neighborhood.

Authorities suspected that the funds, which were intended to support residential accommodation, may have been used toward the purchase of the property.

The earlier investigation was handled by the prosecution’s joint virtual asset crime investigation unit, which examined possible breach of trust involving the use of corporate funds.

The October 29 operation is reportedly intended to examine outstanding questions from the same case and secure material needed to determine how prosecutors should proceed.

Prosecutors continue Bithumb probe under transitional rules

The renewed search has taken place following changes to South Korea’s criminal justice system that came into effect earlier this month.

On October 2, the country’s existing prosecutors’ offices were abolished and replaced by a new Public Prosecution Office and a Serious Crimes Investigation Agency.

Under the revised system, prosecutors generally no longer have the authority to conduct direct criminal investigations, with investigative responsibilities transferred to the newly established structure.

However, amendments to the Criminal Procedure Act and the Public Prosecution Office Act include transitional provisions for cases that were already under investigation before the restructuring.

The provisions allow prosecutors to continue certain existing investigations for up to 90 days after the new system takes effect, particularly when the statute of limitations is approaching or continued investigative work is considered unavoidable.

News1 reported that the latest Bithumb search may have been conducted under the transitional arrangement to complete the investigation that began last year.

Authorities have not disclosed the full scope of the latest search or indicated what action prosecutors may take once the remaining evidence has been reviewed.

Bithumb’s internal controls face parliamentary scrutiny

Bithumb’s handling of executive funds has recently attracted attention from South Korean lawmakers, who have questioned whether cryptocurrency exchanges face sufficient oversight of their senior management.

On October 19, Democratic Party lawmaker Lee Kang-il raised concerns about shortcomings in the eligibility screening and accountability requirements for executives working at cryptocurrency trading platforms.

During the parliamentary discussion, Lee cited Bithumb’s alleged misuse of executive housing allowances alongside separate allegations involving payments connected to token listing requests.

He referred to the exchange’s previous violations of anti-money laundering requirements as another example of concerns surrounding internal controls.

In March 2026, South Korean financial regulators fined Bithumb 36.8 billion won after identifying approximately 6.65 million violations involving customer identity verification, transaction monitoring and other compliance obligations.

The Financial Intelligence Unit imposed a six-month partial business suspension restricting certain external cryptocurrency transfers for new customers.

However, the Seoul Administrative Court subsequently suspended enforcement of the penalty in May after Bithumb challenged the regulatory action.

The exchange has faced separate investigations involving its management. In June, South Korean police searched Bithumb’s offices over allegations that a lawmaker had used political influence to secure employment opportunities for his son at cryptocurrency companies.

The investigation concerned alleged preferential hiring arrangements involving Bithumb and Dunamu, the operator of rival exchange Upbit.