Seoul Prosecutors Raid Bithumb HQ Over 11.6 Billion Won Executive Housing Probe

Prosecutors Search Bithumb's Gangnam Headquarters

Prosecutors in Seoul raided the headquarters of cryptocurrency exchange Bithumb on Thursday morning as part of an investigation into whether former and current executives misused company funds set aside for housing. The search was carried out by Major Crimes Prosecution Division 3 of the Seoul Southern District Public Prosecutors' Office, led by prosecutor Kim Yong-je, which began work at the exchange's offices in the Gangnam district on October 29. At the center of the case is an allegation that Bithumb provided 11.6 billion won in housing lease deposits to four former and current executives, and that part of that money was diverted for private use. South Korea's Financial Supervisory Service disclosed the underlying findings in March 2025 during an examination of the exchange. The regulator reported that one former executive had posed as an eligible housing recipient to receive 1.1 billion won, used the sum to settle the outstanding balance on a privately developed home, and then leased the property to a third party. The matter was referred to prosecutors after that review. An earlier search of the company's premises took place on March 20, 2025, roughly 19 months before this week's operation, when the prosecution's joint virtual asset crime investigation unit examined suspected breach of trust tied to corporate funds. That inquiry centered on Kim Dae-sik, who led Bithumb before later serving as an adviser to the exchange, over claims that he received a 3 billion won lease deposit connected to an apartment in the Seongsu-dong neighborhood. According to DigitalAsset, an official at the prosecutors' office confirmed the latest search and described it as a case referred by the regulator over the former chief executive's apartment purchase funds. Investigators are collecting additional documents and evidence on questions left open by the earlier probe; the office has not disclosed the specific scope of Thursday's search.

A 90-Day Window Under Korea's New Prosecution System

The timing of the raid carries procedural weight. On October 2, South Korea abolished its existing prosecutors' offices and replaced them with a new Public Prosecution Office and a Serious Crimes Investigation Agency. Under the revised framework, prosecutors generally lost the authority to conduct direct criminal investigations, with that responsibility transferred to the new structure. Amendments to the Criminal Procedure Act and the Public Prosecution Office Act, however, include transitional provisions for cases that were already under investigation before the restructuring took effect. Those provisions let prosecutors keep working on an existing case for up to 90 days, particularly where a statute of limitations is approaching or continued work is considered unavoidable. The Bithumb search appears to fall under that arrangement, as prosecutors move to finish an investigation that opened last year. Authorities have not said how extensive the search was or what action may follow once the remaining evidence is reviewed. Parliamentary scrutiny has built in parallel. On October 19, Democratic Party lawmaker Lee Kang-il questioned the adequacy of eligibility screening and accountability requirements for executives at cryptocurrency trading platforms, citing the housing benefit allegations alongside separate claims involving payments connected to token listing requests and past anti-money laundering violations. The compliance record is long: in March 2026, South Korea's financial regulators fined Bithumb 36.8 billion won after identifying about 6.65 million violations of customer identity verification, transaction monitoring and other obligations. The Financial Intelligence Unit ordered a six-month partial business suspension restricting certain external cryptocurrency transfers for new customers, though the Seoul Administrative Court suspended enforcement of that penalty in May after the exchange challenged it. In June, police also searched Bithumb's offices over allegations that a lawmaker had used political influence to arrange employment for his son, an inquiry touching both Bithumb and Dunamu, the operator of rival exchange Upbit.

Corporate Governance, Not a Market Event

This is a corporate-governance matter, not a market event, and it says little about trading conditions on the exchange itself. It sits at the opposite end of the governance spectrum from rules enforced by code in an automated market maker pool or by a token vote in a DAO: the alleged misconduct moved through a centralized company's benefits program, where discretion, not software, decided where the money went. The immediate question for Bithumb is whether the 90-day window produces an indictment or leaves the file unresolved. Either outcome will shape how Korean regulators and lawmakers weigh executive accountability rules for the country's largest trading platforms.