Bang Si-hyuk Accused of Violating Capital Markets Act in Pre-Listing Stock Deal
Jul 17, 2025
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The Securities and Futures Commission under the Financial Services Commission (hereinafter referred to as the Securities and Futures Commission) announced at a regular meeting on the 16th that it had notified the prosecution of three former Hive executives, including Bang Si-hyuk and A, on charges of violating the prohibition of fraudulent transactions under the Capital Markets Act.
The prosecution's complaint is the highest level of sanctions that financial authorities can impose on individuals suspected of violating the Capital Markets Act. Under the Capital Markets Act, if profits from violations of related regulations exceed 5 billion won, they can face life imprisonment or more than five years in prison.
Bang Si-hyuk is accused of tricking existing investors into selling his stake to a special purpose corporation (SPC) established by a private equity fund (PEF) invested by Hive executives in 2019 before listing Hive. Investors believed Bang Si-hyuk's words and sold their holdings to SPC, but Hive has already carried out corporate disclosure procedures, including applying for designated audits, which are pre-IPO procedures.
After Hive went public, SPC sold its holdings. Bang Si-hyuk reportedly earned about 190 billion won in unfair profits, or 30% of the profits from the sale, under a pre-signed shareholder contract.
Financial authorities suspect that Bang Si-hyuk mobilized private equity funds to bypass protection deposits (a policy that prevents major shareholders or executives and employees from selling stocks for a certain period of time after listing).
Bang Si-hyuk attended the Financial Supervisory Service (hereinafter referred to as the Financial Supervisory Service) at the end of last month and was investigated, but he did not attend the calling opportunity prepared by the Financial Services Commission.
The case is expected to be allocated to the Seoul Southern District Prosecutors' Office, which specializes in economic crime investigations, according to a complaint by financial authorities. Apart from this, the police are also investigating the same charges. The financial crime investigation unit of the Seoul Metropolitan Police Agency applied for a search warrant for Hive's headquarters twice, but it was rejected on the grounds that the FSS investigation was underway. In response, the police seized and searched the Korean exchange on the 30th of last month and secured related data.
In this regard, Hive said "It is regrettable that it was not accepted that the largest shareholder attended the FSS investigation and actively explained that he did not pursue private interests on the premise of listing." We respect the decision of the financial authorities and will do our best to recover the trust of the market and stakeholders by explaining related suspicions more actively in future investigations" he said.
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