Trader Fined and Jailed Over Fraudulent Scheme Worth Millions

Rate this post

A crypto trader was both fined and jailed by the United States Futures Trading Commission (CFTC). The fine was a no slap on the wrist and amounted to nearly $1 million.

Joseph Kim is charged with running a fraudulent scheme involving bitcoins and litecoins. CFTC’s press release from November 9^th stated that the Arizona-based trader fully admitted to illegal actions towards investors. Kim has also shared that he misappropriated more than $500 000 from his previous employer.

For 2 months between September and November Kim started embezzling funds from his employer. He was employed by a trading firm based in Chicago. According to the press release, he caused the company over $600 000 in losses.

This naturally led to the company questioning Kim about the missing tokens. He was quick to lie about so called “security issues” with the crypto exchange. When the theft was discovered in November, the trader was instantly fired.

The authorities should have taken action against the trader sooner

Unfortunately, this wasn’t enough to stop the trader. Kim found a creative approach and started soliciting funds from the company’s clients. His lawyer argued that he started this endeavor in order to be able to repay the money he previously stole.

This of course didn’t happen and he ended up taking nearly $550 000 from at least 5 customers. He managed to gather the funds between December and March 2018.

The customers were told that Kim started his own company. He also said he left his previous employer and would guarantee huge investment returns with a low-risk arbitrage strategy. Needless to say, the trades he made were anything but low-risk.

Maybe if things turned out differently, he would have won big and actually paid the people and his previous company back. Unfortunately, that did not happen and he made super high-risk trades with the acquired cryptocurrency and lost all the money from the company’s customers.

CFTC has permanently banned Kim from any form of trading. He was fined for a grand total of $1 1146 000 and sentenced to 15 months in jail. Hopefully more traders willing to go to such lengths to cover up their mistakes will take this as a warning.

You can also check out: