According to the press release, a resident in Arizona was incarcerated and fined $ 1.1 million from the Commodity Futures Trading Commission (CFTC) for managing a fraudulent Bitcoin and Litecoin program.
Joseph Kim of Pheonix, Arizona, admitted that he had orchestrated a fraudulent scheme of Bitcoin and Litecoin that caused over $ 1 million in losses, of which over $ 600,000 were subtracted. Kim was sentenced to 15 months in prison on November 9th.
Between September and November 2017, Kim stole Litecoin and Bitcoin from his employer, a Chicago-based trading company, and deposited the funds into his account. Asked about missing funds, Kim stated that there was a security problem with the encrypted exchange, so the funds had to be transferred to various accounts. He was immediately fired.
Undeterred, Kim then started defrauding customers in hopes of using profits to reimburse the company. Between December 2017 and March 2018, Kim allegedly stole about $ 545,000 from at least five customers.
Reportedly, Kim lied to his clients, saying that he voluntarily left his old employer to start his own trading company. Kim also falsely claimed that he would invest his funds in a low-risk currency arbitrage strategy, when he actually invested money in high-risk directional bets on the movement of cryptocurrencies, resulting in the loss of all $ 545,000.
In addition to having to repay $ 1,146,000 to her company and her clients, Kim has been permanently banned from trading, including cryptocurrency, and sentenced to 15 months in prison.
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