South Korean prosecutors are investigating two of the country’s largest cryptocurrency exchanges, Upbit and Bithumb, over allegations that they facilitated the transfer of funds by a former lawmaker who is now under investigation for fraud.

The former lawmaker, Kim Byung-joon, is accused of embezzling money from a non-profit organization that he founded. He is also accused of using the organization’s money to invest in cryptocurrency.

Prosecutors believe that Kim transferred some of the embezzled funds to Upbit and Bithumb. They are now investigating the exchanges to see if they knew about the illegal activity and did nothing to stop it.

Upbit and Bithumb have denied any wrongdoing. They have said that they followed all of the relevant regulations and that they did not know that the funds were being transferred illegally.

The investigation into Upbit and Bithumb is part of a wider investigation into the cryptocurrency industry in South Korea. The government has been concerned about the risks of cryptocurrency fraud and money laundering.

In recent months, the government has taken a number of steps to regulate the cryptocurrency industry. It has banned cryptocurrency exchanges from offering anonymous accounts and it has required exchanges to report suspicious transactions to the authorities.

The government’s crackdown on the cryptocurrency industry has been met with mixed reactions. Some people have welcomed the crackdown, saying that it is necessary to protect investors from fraud. Others have criticized the crackdown, saying that it is stifling innovation in the cryptocurrency industry.