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Lee Jeong-hoon, the former chairman of Bithumb, one of South Korea’s major cryptocurrency exchanges, is at the center of a legal battle and might be facing an eight-year prison sentence in the appeal whose verdict is scheduled for Jan. 18.

According to Korean local media reports, prosecutors contend that Lee intended to revamp Bithumb’s governance to gain from exchange coins, circumventing financial regulations. They claim Lee knew about challenges in the BXA Coin listing but didn’t disclose it to Kim. Despite listing issues, Lee purportedly received payments without informing Kim about the decision not to list BXA Coin.

The South Korean prosecutors requested an eight-year prison sentence for Lee Jung-hoon.

Lee’s defense challenges these assertions, pointing out discrepancies in Kim’s statements and questioning his reliability. Lee insists on Kim’s competence to lead Bithumb, maintaining that Kim was informed about the progress of BXA Coin’s listing.

Lee Jeong-hoon faces legal issues related to accusations of violating the Act on Aggravated Punishment for Specified Economic Crimes, particularly fraud. The prosecution alleges his involvement in a 110 billion won fraud scheme with BK Group Chairman Kim Byung-geon. The charges originate from a deal in which Lee purportedly presented Kim with the chance to acquire and jointly manage Bithumb, along with commitments to list BXA on the platform.

Related: Bithumb plans to be first crypto exchange listed on Korea stock market: Report

The decision on Lee’s appeal might set a precedent for legal proceedings involving cryptocurrency exchanges and governance. This development coincides with Bithumb’s preparations for an IPO on KOSDAQ by 2025.

The appeal’s result will significantly impact Bithumb’s future and the fate of BXA Coin. A guilty verdict might trigger a reassessment of governance frameworks in cryptocurrency exchanges, potentially resulting in increased regulatory scrutiny.

While the cryptocurrency community and investors anticipate the appeal outcome, the case underscores the industry’s dynamic nature and the necessity for well-defined regulatory frameworks to tackle governance issues and uphold trust among investors and stakeholders.

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