{"id":72765,"date":"2023-10-15T03:20:55","date_gmt":"2023-10-15T07:20:55","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/prosecutors-probe-kakao-crypto-embezzlement-case\/"},"modified":"2023-10-15T03:20:58","modified_gmt":"2023-10-15T07:20:58","slug":"prosecutors-probe-kakao-crypto-embezzlement-case","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=72765","title":{"rendered":"Prosecutors Probe Kakao Crypto \u2018Embezzlement\u2019 Case"},"content":{"rendered":"
\n

South Korean prosecutors will launch a \u201cfull-scale investigation\u201d into the former CEO of the tech powerhouse Kakao over crypto \u201cembezzlement\u201d claims.<\/p>\n

Chosun Ilbo reported that the case will be handled by the Seoul Southern District Prosecutors\u2019 Office\u2019s Virtual Asset Crime Joint Investigation Unit.<\/p>\n

Prosecutors will probe the tech giant\u2019s founder and former CEO Kim Beom-su and fellow Kakao executives.<\/p>\n

Kim and others have been accused of embezzlement and breach of trust.<\/p>\n

The executives have also been accused of conducting fraudulent transactions, in violation of the terms of the Capital Markets Act.<\/p>\n

A civic group named Economic Democracy 21 (literal translation) last month filed a legal case against Kim.<\/p>\n

It also accused \u201ckey officials\u201d involved with the Kakao-operated Crust (aka Klaytn) ecosystem and Ground X, Kakao\u2019s blockchain subsidiary, of wrongdoing.<\/p>\n

Kim Kyeong-yul, the head of Economic Democracy 21, has been summoned by prosecutors, who want to hear more about the allegations.<\/p>\n

Kakao is one of South Korea\u2019s biggest tech firms.<\/p>\n

It operates KakaoTalk, the most popular chat app in the nation.<\/p>\n

Some 90% of South Korean smartphone owners use the app.<\/p>\n

Kakao also operates a crypto exchange-partnering neobanking operation named KakaoBank.<\/p>\n

And the firm launched the KLAY token through its overseas subsidiaries, in addition to a popular crypto wallet that debuted in 2020.<\/p>\n

The firm was one of the first backers of the market-leading \u201cunicorn\u201d exchange Upbit, and many Upbit executives are former Kakao employees.<\/p>\n

But Economic Democracy 21 claims that \u201ca small group of Kakao insiders\u201d made \u201cillegal profits\u201d via illicit KLAY transactions.<\/p>\n

This, they claim, was mainly done by selling coins to investors, and then \u201cembezzling the money instead of using it for its intended purpose.\u201d<\/p>\n

South Korean Tech Giant Kakao Facing Crypto Investigation<\/h2>\n

The group has alleged that Kakao officials embezzled coins during a private pre-sale event before KLAY was listed on major crypto exchanges.<\/p>\n

The group has claimed Kim and others may have misappropriated up to $223 million.<\/p>\n

And the group has claimed some officials engaged in insider trading, with Klaytn managers accused of siphoning off cryptoassets.<\/p>\n

The group claims this took place at a time when Klaytn was looking to become the biggest blockchain player in East Asia.<\/p>\n

Klaytn partners include some of South Korea\u2019s biggest business groups, such as LG.<\/p>\n

Kakao affiliate spokespeople have asked for time to conduct internal investigations into the allegations, but have suggested the claims are inaccurate.<\/p>\n

A Kakao\/Klaytn\/Crust official was quoted as stating:<\/p>\n

\n

\u201cWe cannot comment much on this case. But the [allegations] are one-sided and groundless.\u201d<\/p>\n<\/blockquote><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

South Korean prosecutors will launch a \u201cfull-scale investigation\u201d into the former CEO of the tech powerhouse Kakao over crypto \u201cembezzlement\u201d claims. Chosun Ilbo reported that the case will be handled by the Seoul Southern District Prosecutors\u2019 Office\u2019s Virtual Asset Crime Joint Investigation Unit. Prosecutors will probe the tech giant\u2019s founder and former CEO Kim Beom-su […]<\/p>\n","protected":false},"author":1,"featured_media":72766,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[243],"tags":[83],"class_list":["post-72765","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto","tag-featured"],"yoast_head":"\nProsecutors Probe Kakao Crypto \u2018Embezzlement\u2019 Case | iFintechWorld<\/title>\n<meta name=\"description\" content=\"South Korean prosecutors will launch a \u201cfull-scale investigation\u201d into the former CEO of the tech powerhouse Kakao over crypto \u201cembezzlement\u201d\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=72765\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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