South Korean police raid Hancom Inc offices, chairman’s home over slush fund suspicions

South Korean police agents raided the offices of software maker Hancom Inc. and the home of Hancom Group chairman Kim Sang-Cheol on suspicions of manipulating the price of Arowana tokens and creating a slush fund on Oct. 20, according to local media reports.

The Gyeonggi Nambu Provincial Police Station sent investigators to Hancom’s headquarters in the city of Seongnam and Kim’s house to seize documents and digital records.

Arowana’s price manipulation

The seizure and raid came after speculation that Arowana’s token price skyrocketed due to price manipulation.

In April, the Arowana token was issued on the Bithumb digital asset trading platform, and its price shot up from its starting price of 50 won ($0.03) in the first 30 seconds upon launch to 53,800 won ($37.56). The token then plummeted to 300 won.

Min Byung-deok, a Democratic Party of Korea member, ordered an investigation into the token.

Hancom With, Hancom’s blockchain subsidiary, has invested in Arowana Tech, the creator of the Arowana token. Previously, multiple news media broke the news that Kim owned the Arowana token through a secret Market Making (MM) contract and that Kim managed the tokens through his son and directed the creation of a slush fund.

Meanwhile, Kim has been facing charges, including embezzlement, related to allegations over the creation of slush funds using the profits from Arowana.

In October 2021, local TV station JTBC published a transcript that featured a conversation involving Kim, Per Paxnet, and Asia Kyunjae, Kim, who claimed they “own Arowana. “Kim also said a slush fund was created to distribute to 10 people to discuss ways to make money.

Hancom has since published statements to refute allegations that Kim owns Arowana and claimed the CEO made a “poor choice of words. “

Bithumb has delisted and suspended trading of Arowana as of Oct. 26, 2021.

Meanwhile, Lee Jong Hoon, the former chairman of Bithumb, was summoned to serve as a witness and testify in the ongoing investigation into Arowana’s price manipulation by the National Assembly but failed to appear. The Political Affairs Committee plans to bring charges against Lee and has resummoned him to testify on the 24th.