Man sentenced to incarceration and $1.1 million fine for Fraudulent Bitcoin, Litecoin Schemes

On Nov. 9, the U.S. Commodity Futures Trading Commission (CFTC) reported that a U.S. citizen Joseph Kim of Phoenix, Arizona has been fined $ 1.1 million and sentenced to 15 months in jail for misappropriating Bitcoin (BTC) and Litecoin (LTC) from several people.

According to a report, the CFTC found out that Kim has transferred approximately $601,000 worth amount of Bitcoin and Litecoin to his own accounts in 2017 from his employers’ account which is a Chicago based proprietary trading firm. Kim tried to save himself by claiming that security issues made him transfer digital currencies to several accounts when he was enquired about missing cryptocurrencies. But shortly after, his misleading was found and kim was fired from the company then.

Kim reportedly then defrauded private investors in order to return funds to his employer. He falsely stated that he had left the company voluntarily to start his own trading company and lured around $545,000 worth of cryptocurrencies from five individuals. Kim lured these individuals to invest but later said that he had lost all the investors fund following a high – risk bet.

As Kim’s misappropriation was discovered & founded guilty for fraud, the commission has imposed a permanent ban on trading and solicitation on him. The CFTC has ordered him to pay $1.1 million to compensate his company and the customers.

Kim, in a separate criminal action, has also received a 15 month sentence by the U.S. Attorney for the Northern District of Illinois, for defrauding his employer and misappropriating private investors’ funds.

The CFTC Director of Enforcement, James Mc Donald, says that in order to prevent crypto-related crimes, the commission will continue to cooperate with the U.S. Department of Justice (DoJ) and the FBI.

The founder of crypto token trading platform Ether Delta, Zachary Coburn was charged with operating an unregistered securities exchange by the U.S. Securities and Exchange Commission(SEC) earlier this month. For an 18 month operating period, he agreed to pay Up to $400,000 in fines.