Prosecutors have demanded a 20-year prison sentence for Kang Jong-hyun, the de facto owner of the cryptocurrency exchange Bithumb, who is on trial for stock manipulation and embezzlement involving Bithumb-affiliated companies.

The Seoul Southern District Court's Criminal Settlement Division 12 (Presiding Judge Park Jong-yeol) held a sentencing hearing today (September 18) for six individuals, including Kang, who were indicted on charges of breach of trust and embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes, as well as fraudulent unfair trading under the Capital Markets Act.

Prosecutors asked the court to sentence Kang to 20 years in prison, along with a fine of 150 billion won and the forfeiture of 18.1 billion won.

"Although (Kang) is the principal offender of this case, he denies the major crimes," prosecutors stated as the reason for the sentencing demand, adding, "The offenses are severe, including instigating the destruction of evidence and flight during the investigation process."

Former Chorokbaek Group Chairman Won Young-sik, who was indicted along with others on charges of participating in stock manipulation, faces a demand of 15 years in prison, a 30 billion won fine, and approximately 2.4 billion won in forfeiture. Kang's younger sister, Bucket Studio CEO Kang Ji-yeon, faces a 7-year prison demand.

A 6-year prison term was demanded for a representative of an unlisted Bithumb affiliate surnamed Cho, and a 5-year prison term was requested for another employee surnamed Cho who handled accounting duties under Kang's instructions.

A 5-year prison term was also demanded for another employee surnamed Kim.

In his closing argument, Kang's defense counsel claimed, "Fraudulent unfair trading must be a case where there is a risk of misleading other investors' judgments and harming market fairness." The lawyer argued, "Judgments should focus on the impact on market fairness and reliability, but the prosecutors did not address this and lumped together comprehensive facts."

The lawyer also rebutted, "The defendant had no intent to commit breach of trust or the intention to acquire illegal profits, and even if the crime of breach of trust is established, applying the Act on the Aggravated Punishment of Specific Economic Crimes is impossible. Even if profits were acquired, the Specific Economic Crimes Act cannot be applied if the amount cannot be concretely calculated, and experts and witnesses testified that (the prosecutors') damage calculation method was unfair."

Kang and the others were sent to trial on charges of embezzling 62.8 billion won from Bithumb affiliates between 2020 and September 2022.

They are also accused of reaping 350 billion won in illicit gains through fraudulent unfair trading, such as issuing convertible bonds (CBs) from Bithumb affiliates in 2021 and spreading favorable rumors to inflate stock prices, and causing losses to the company through breach of trust by transferring call options—which allowed them to repurchase the CBs—at a low price during the process.

In connection with this, investigations showed that ahead of a prosecution search and seizure in 2022, Kang ordered affiliate employees to destroy evidence and helped an employee who managed accounts under borrowed names go into hiding.

(Photo: Yonhap News)