South Korea’s crypto scene is once again under fire as Bithumb, one of the country’s largest exchanges, is raided over alleged embezzlement by its former CEO. On March 20, Seoul prosecutors searched Bithumb’s offices, investigating claims that ex-CEO and current adviser Kim Dae-sik used company funds—3 billion Korean won (about $2.2 million)—to finance a personal apartment lease.

The country’s Financial Supervisory Service had already flagged the suspicious payment and passed the case to prosecutors. Bithumb later admitted that Kim took out a loan and repaid the full amount after the investigation began.

But the controversy doesn’t end there. Anonymous sources told Wu Blockchain that some crypto projects allegedly paid as much as $10 million in listing fees to intermediaries connected to Bithumb and rival exchange Upbit. These “broker fees” reportedly ranged from 3% to 5% of token supplies—raising serious questions about transparency and fairness in South Korea’s crypto listings.

Upbit strongly denied any wrongdoing, demanding that Wu Blockchain provide evidence and name the projects involved in the accusations.

All of this comes at a critical time for Bithumb, which is actively trying to go public. CEO Lee Jae-won is pushing for an IPO in 2025, after years of delays caused by legal troubles. In 2021, former board chairman Lee Jeong-hoon was indicted for fraud but later acquitted—allowing Bithumb to revive its public listing efforts.

Despite choosing an underwriter in 2023 and launching a non-exchange business to streamline its IPO process, Bithumb reported a 57% drop in revenue last year—casting doubts on the company's future.

The embezzlement probe could derail Bithumb’s IPO dreams once again.