Fraud Charges Against Crypto Trader

As the crypto market grows from its nascent beginnings to a mature exchange, the regulators are starting to apply the rules. For about 10 years the crypto market has been more or less an enigma to the SEC because it was a new technology and the traditional rules had to be altered to address it. New terms like blockchain and distributed ledger were not defined in the old code book.

Now the SEC has grown some teeth and is starting to bite. US prosecutors filed the first civil fraud case against an ICO founder whom allegedly stole money from clients, now they are filing the first case of criminal fraud in blockchain history.

Joseph Kim was hired as a trader in 2016 by Consolidated Trading LLC based in Chicago. Prosecutors allege that from September 2017 to November 2017, Kim transferred more than $2 million of the companies bitcoins and litecoins to his personal account. Kim referred to himself as a ‘DEGEN’ (degenerative gambler) and the alleged theft was to cover his gambling losses. Federal investigators said that he considered himself ‘invincible’.

At one point, he lied about the transfers and tried to cover up the trades by repaying some of the funds.

Kim sent an email to his bosses were he allegedly admitted to the scheme,

“I can’t believe I did not stop myself when I had the money to give back, and I will live with that for the rest of my life”.


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