Hancom Heir Granted Bail in South Korean ‘Crypto Slush Fund’ Investigation

A South Korean court has granted bail to the son of Hancom Group’s Chairman as prosecutors continue their investigation into an alleged “crypto slush fund.”

Authorities have been looking into these claims since 2021, when reports began to emerge regarding Hancom Group Chairman Kim Sang-cheol.

Prosecutors suspect that Kim Sang-cheol may be the “secret owner” of an altcoin called Arowana (ARW), which is reportedly developed by a company named Arowana Tech.

The coin was listed on the Bithumb exchange in mid-2021 but has since been removed.

Arowana (ARW) prices since 2022. (Source: CoinMarketCap)

Hancom Investigation Continues

Hancom is primarily recognized in South Korea as the creator of Hancom Office, a popular suite of word processing, spreadsheet, and presentation software.

This office suite was initially launched in 2001 and has since established itself as a staple in the South Korean business sector.

According to Yonhap, the Criminal Division of the Seongnam Branch of the Suwon District Court has arrested and indicted Kim’s 35-year-old second son.

The younger Kim is set to face charges related to violations of the Act on the Aggravated Punishment of Specific Economic Crimes and breach of trust.

The court has also approved bail for an individual identified by the surname Jeong (47 years old), who is reported to be the CEO of Arowana Tech.

Police apprehended the younger Kim on December 5 and held him in custody for 111 days. Prosecutors raised concerns regarding the suspects’ potential flight risk.

However, the court ultimately decided to grant bail at just under $375,000.

The headquarters of Hancom. (Source: MBC News/YouTube)

The court has also placed restrictions on the residences and movements of both the younger Kim and Jeong prior to the trial.

Prosecutors believe that “from December 2021 to June 2023,” the younger Kim and Jeong sought assistance from a “domestic virtual asset consulting company.”

The prosecution stated that the pair requested the company to exchange ARW 14.57 million for Ethereum and Bitcoin assets.

Suspects ‘Enlisted Help of Overseas Crypto Firm’

Investigators suspect that the company generated nearly $6 million “excluding fees” from the sale and subsequently transferred the ETH and BTC to the younger Kim’s “personal electronic device.”

Prosecutors also claim to have evidence that “an overseas cryptoasset business” was “asked to sell 4 million Arowana tokens” on behalf of the younger Kim.

According to investigators, the “overseas” firm raised approximately $1.2 million in cryptocurrency from this transaction. The coins, prosecutors noted, were also transferred to the younger Kim’s wallet.

Investigators indicated that the younger Kim “utilized the slush fund for personal purposes,” which included purchasing non-fungible tokens (NFTs).

Prosecutors further believe the suspect used the funds for trading, settling credit card bills, and acquiring items from department stores.

Hancom With, the blockchain division of Hancom, is recognized as a supporter of Arowana Tech. The affiliate invested in Arowana Tech in April 2021, aiming to establish a blockchain-based gold trading enterprise.

Hancom Chairman Kim Sang-cheol. (Source: SBS Biz News/YouTube)

In a transcript released by a suspected whistleblower in October 2021, Kim Sang-cheol appeared to assert that he “owned” Arowana Tech.

Hancom has contested the authenticity of the transcript. Police conducted searches at Kim Sang-cheol’s residence and Hancom offices in October 2022 as part of the ongoing investigation.

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