A South Korean court has granted bail to the son of the Chairman of Hancom Group in the midst of an investigation into an alleged “crypto slush fund.” The Chairman, Kim Sang-cheol, is suspected of being the “secret owner” of an altcoin called Arowana (ARW) created by a company named Arowana Tech. The coin was listed on the Bithumb exchange in mid-2021 but has since been delisted. The younger Kim, along with the CEO of Arowana Tech, has been charged with violations of economic crime laws and breach of trust. The court released the younger Kim on bail, but with restrictions on his residence and movements before the trial.
Prosecutors believe that from December 2021 to June 2023, the younger Kim and the CEO of Arowana Tech sought the assistance of a domestic virtual asset consulting company to exchange ARW tokens for Ethereum and Bitcoin. A significant amount of money was raised from this exchange, and the cryptocurrencies were transferred to the younger Kim’s personal electronic device. Additionally, an overseas cryptoasset business was enlisted to sell millions of Arowana tokens on behalf of the younger Kim, raising another substantial amount of money. Investigators claim that the younger Kim used the slush fund for personal purposes, such as purchasing NFTs, trading, paying credit card bills, and buying goods from department stores.
Hancom Group, known for developing the Hancom Office suite, has a blockchain arm called Hancom With, which has invested in Arowana Tech with the goal of establishing a blockchain-powered gold trading business. In October 2021, a transcript released by a whistleblower suggested that Kim Sang-cheol had claimed ownership of Arowana Tech. This led to police raids on Kim Sang-cheol’s home and Hancom offices in October 2022 as part of the ongoing investigation. The court has decided to grant bail to the younger Kim and the CEO of Arowana Tech, despite concerns about their potential flight risk.
The Hancom Group Chairman, Kim Sang-cheol, has been under investigation since 2021 following reports of his alleged involvement in the creation and ownership of the Arowana altcoin. Hancom is primarily known in South Korea for developing Hancom Office, a popular suite of office software used by many businesses in the country. The younger Kim and the CEO of Arowana Tech have been charged with financial crimes and breach of trust for their alleged involvement in the crypto slush fund. Despite the ongoing investigation and legal proceedings, the court has allowed both suspects to be released on bail with restrictions in place.
The younger Kim and the CEO of Arowana Tech reportedly used the assistance of a domestic virtual asset consulting company to exchange Arowana tokens for Ethereum and Bitcoin, resulting in significant amounts of money being raised. They also engaged an overseas cryptoasset business to sell millions of Arowana tokens, further increasing the funds available in the slush fund. Prosecutors claim that the younger Kim utilized the slush fund for personal expenses, including the purchase of non-fungible tokens, trading activities, credit card payments, and shopping at department stores. The case has raised concerns about the potential misuse of cryptocurrency and the need for increased regulation and oversight in the industry.
Hancom With, the blockchain arm of Hancom Group, has been linked to Arowana Tech through an investment made in April 2021. The investment was aimed at developing a blockchain-powered gold trading business, highlighting the company’s interest in leveraging blockchain technology for financial purposes. A transcript released by a whistleblower in October 2021 suggested that Kim Sang-cheol had claimed ownership of Arowana Tech, prompting further scrutiny and police raids on his home and company offices in October 2022. The court’s decision to grant bail to the suspects reflects the complexities of the case and the ongoing investigation into the alleged crypto slush fund involving Hancom Group and Arowana Tech.
