[2022 National Audit] Financial Services Commission Chairman "Reviewing Whether Arowana Coin Is Used for Illegal Fund Transactions"

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] On the 6th, Kim Joo-hyun, Chairman of the Financial Services Commission, said regarding the allegations of slush fund creation by Hancom through Arowana Coin, "I will consider whether this can be seen as illegal fund transactions."

Chairman Kim made this remark during the Financial Services Commission's audit at the National Assembly's Political Affairs Committee in the afternoon, responding to Min Byung-duk, a member of the Democratic Party of Korea, who pointed out, "The financial authorities are neglecting the allegations that Hancom created slush funds through Arowana Coin."

Chairman Kim said, "The Financial Intelligence Unit (FIU) primarily handles anti-money laundering tasks," adding, "When issues regarding virtual assets arise, the FIU regulates virtual assets, but since its duties are limited, I have actively participated in parliamentary discussions on investor protection because there must be a legal basis for it."

On the same day, Representative Min summoned Park Jin-hong, former CEO of Exstock and issuer of Arowana Coin, as a witness, focusing on whether the coin colluded with the exchange during its listing on the virtual asset exchange Bithumb and manipulated prices. Representative Min urged, "Bithumb should undergo a special audit."

Arowana Coin was listed on Bithumb in April last year, and within just 30 minutes, its price surged from 50 won to 53,800 won per coin, raising suspicions of price manipulation by more than 1,000 times.

This coin is a virtual asset usable on the digital gold platform Arowana and is known to investors as the ‘Hancom Token.’ Hancom With, a KOSDAQ-listed affiliate of the Hancom Group, announced that it invested in the Singaporean corporation (Hancom Singapore), which holds shares in the Arowana Token issuer (Arowana Tech).

However, allegations have been raised that Kim Sang-chul, Chairman of Hancom Group, was the actual owner of the Arowana Coin issuer and that slush funds were being created through Arowana Coin, prompting a police investigation.

Meanwhile, the Political Affairs Committee issued a summons order for Lee Jung-hoon, former CEO of Bithumb, who was selected as a witness for the audit that day. Baek Hye-ryun, Chairwoman of the Political Affairs Committee, explained, "This measure is to order Lee Jung-hoon to accompany us to the audit venue before the end of today's audit, despite his submission of a letter of absence."

Former CEO Lee submitted a letter of absence to the committee members last month, stating, "Due to health issues and criminal litigation, it is difficult to attend the audit as a witness on the 6th." He added, "Since 2020, I have been diagnosed with severe depression and panic disorder. I have been unable to engage in normal activities such as meeting outsiders and have long since stepped down from management."

In response, Representative Min said, "There is public suspicion that former Bithumb Chairman Lee Jung-hoon was involved in price manipulation of coins on Bithumb," adding, "The allegations of slush fund creation by Hancom, the issuer of Arowana Coin, remain unresolved, and due to the lack of supervisory regulations, we requested him as a witness."

He continued, "His absence is intentional, and he is avoiding attendance with absurd logic," urging, "Since this is an important time to investigate the problems and causes of virtual assets, please issue a summons order."

Meanwhile, former CEO Lee submitted a letter of absence to the Political Affairs Committee members on the 30th of last month, stating, "Due to health issues and criminal litigation, it is difficult to attend the audit as a witness on the 6th." He said, "Since 2020, I have been diagnosed with severe depression and panic disorder. I have been unable to engage in normal activities such as meeting outsiders and have long since stepped down from management."