According to a press release imposed by the U.S. Commodity Futures Trading Commission (CFTC). Joseph Kim, residing in Phoenix, Arizona, cryptocurrency trader has been handed down a 15-month imprisonment and a fine of $1.1 million after being convicted of embezzling cryptocurrency from multiple individuals.
Investigations revealed that during the months of September to November 2017, Kim deceitfully led his Chicago-based proprietary employer, trading firm , making a series of Litecoin and Bitcoin by channeling company-owned cryptocurrency into his own personal accounts.
Defrauding the Employer
Upon the discovery of these unauthorized transfers, the company confronted Kim, who falsely claimed the movements were necessary due to imminent security threats on the platform holding the funds.
After thorough investigations in November 2017 unveiled a staggering loss amounting to roughly $601,000, Kim was promptly dismissed from his position.
Faced with financial desperation to repay his former company, Kim turned to individual investors for money. The CFTC indicated that between December 2017 and March 2018, he swindled five investors out of an additional $545,000, misrepresenting his departure from his previous job to establish his own trading enterprise.
He misled investors by promising only low-risk investments, but instead engaged in high-stakes trading, ultimately squandering all $545,000.
Fines and Punishment
Given the complexity of this fraudulent event, Kim has been ordered by the CFTC to pay $1,146,000 in restitution to both his former employer and the defrauded investors. Moreover, he has been permanently barred from any further trading activities by the commission. any trades or solicitations in the future.
The U.S. Attorney's Office in the Northern District of Illinois brought separate criminal charges against Kim. He admitted to mishandling investor funds and defrauding his employers, resulting in a 15-month jail sentence.
Mr. James McDonald, Director of Enforcement at the CFTC, emphasized continuous efforts to work alongside the U.S. Department of Justice (DoJ) and the FBI to combat cryptocurrency-related crimes.
In a statement, McDonald stated:
\"Today's decision is a testament to the CFTC's unwavering dedication to overseeing virtual currency markets and safeguarding public interests. The criminal indictment and subsequent sentencing are further proof of our collaboration with the Department of Justice to identify malpractice in these sectors. My gratitude extends to U.S. Attorney Lausch and his team, along with the FBI staff, for their invaluable support in this case.\"
Earlier in November, Zachary Coburn founder of EtherDelta , an Ethereum-based crypto exchange, faced charges from the U.S. Securities and Exchange Commission for illegally running a securities trading platform without proper registration. The regulatory body had previously taken enforcement action against certain tokens on the platform, insisting they were securities. Coburn agreed to settle the case by paying $400,000 for 18 months of unauthorized operations. Based in the UK, Jimmy has keenly observed blockchain developments for several years, expressing optimism about its potential to bring financial accessibility to everyone.
