The prosecution has launched a full-scale investigation into the 'Klay (KLAY)' coin created by a Kakao affiliate. This case is drawing attention because, unlike other coin-related cases, it involves a major corporation, Kakao. The civic group that reported Kakao and its affiliates claims that insiders involved in the issuance and operation of Klay received the coins and gained unfair profits. Accordingly, the prosecution's investigation is expected to focus on tracking the movement of Klay and the flow of funds.
According to the legal community on the 18th, the Virtual Asset Crime Task Force of the Seoul Southern District Prosecutors' Office (headed by Lee Jeong-ryeol) summoned Kim Kyung-yul, the head of the civic group Economic Democracy 21, which reported Kim Beom-su, the founder of Kakao, and executives of Klaytn-related companies on charges of embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, on the 11th for questioning. It is known that the prosecution specifically reviewed the contents of the complaint and the submitted evidence with Kim.
Klaytn is a blockchain platform developed in 2018 by Ground X, a Japanese subsidiary of Kakao, and Klay is the coin released by Kakao through Klaytn. Ground X announced that it would create a blockchain ecosystem where various services on the Klaytn platform could be used through Klay. Klay was listed on Upbit Singapore and Upbit Indonesia in 2019, and in 2021, it was listed on Binance, the world's largest exchange by trading volume. Domestically, it is listed on Bithumb.
The civic group claimed in the complaint that employees related to the platform business, i.e., 'insiders,' received Klay under various pretexts such as investment and service fees and gained unfair profits. After Ground X, the Japanese subsidiary that operated the existing platform business, was liquidated last year, the Klay-related business was divided between Kakao's other affiliate 'Crust' and the operation was handled by the 'Klaytn Foundation.' Subsequently, Crust heavily promoted overseas investment projects, and the civic group claims that Klay was transferred to insiders during this process. Employees who changed their affiliation from Kakao and Ground X to Crust reportedly received Klay under the pretext of directly managing business projects, and the civic group claims that Mr. A, a former Crust employee, established a personal company and received Klay under the project name, which was then converted into cash. The civic group provided the prosecution with a list of three companies suspected of actually receiving Klay.
Along with this, the civic group raised suspicions about the opaque handling of funds raised through Ground X's initial 'private sale' of Klay to some investors before listing, which reportedly raised between 150 billion and 300 billion KRW. If billions of won were raised through the private sale, the money should have been deposited into Ground X, which operated the platform, but the financial statements do not reflect the acquisition of cash assets.
The Seoul Southern District Prosecutors' Office investigation is reported to have focused on 'where the Klay went.' They plan to verify whether the individuals or companies that received Klay are indeed employees of Kakao and its affiliates, which companies Crust actually invested in, whether there were criteria for investment and transactions, and who made the investment decisions. The prosecution also intends to check where the funds raised through the private sale are accumulated or whether they were actually spent on business expenses. The civic group secured transaction records related to Klay and submitted them to the prosecution.
The Klaytn Foundation stated, "We are taking this matter seriously and are responding through fact-checking the complainant's claims and communicating with related parties," adding, "What we can say for sure is that the claims made by Economic Democracy 21 are baseless and one-sided." Kakao said, "Crust is merely an affiliate of our company and we do not intervene in its management, so Kakao has no separate position."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
