Joseph Kim, a US citizen from Phoenix, Arizona, was found guilty of misappropriating Litecoin (LTC) and Bitcoin (BTC) from several people. He received a 15-month jail sentence and a $1.1 million fine. This was reported by the US Commodity Futures Trading Commission (CFTC). The case highlights how crypto fraud penalties rise as authorities crack down on illegal activities in digital currency.

The Commission found that Kim “defrauded his employer, a proprietary trading company based in Chicago.” He transferred about $601,000 worth of BTC and LTC to his own accounts in 2017. When questioned about the missing funds, Kim claimed he moved the cryptocurrencies for “security issues.” Soon after, his employer discovered the theft and fired him.

Trying to repay his employer, Kim then defrauded several private investors. He falsely solicited about $545,000 worth of cryptocurrencies from five people. He claimed to have retired voluntarily to start his own trading firm.

Unfortunately for Kim, he lost all the investors’ funds after making a high-risk bet.

Crypto Fraud Penalties Rise

Based on the peculiarity of the case, the Commission ordered Kim to pay a restitution fine of $1.1 million to his customers and former employer. In addition, a permanent solicitation and trading ban have been imposed on him by the Commission.

Furthermore, Kim pleaded guilty to misappropriating private investors funds and defrauding his employer in a separate criminal action brought against him by the US Attorney for the Northern District of Illinois. He has summarily received a 15-month jail sentence.

James McDonald, the Commission’s Director of Enforcement, emphasized the CFTC’s commitment to cooperation. The agency works closely with the FBI and the US Department of Justice (DoJ). Their goal is to prevent crimes in the crypto community.

Earlier this month, the US Securities and Exchange Commission (SEC) charged Zachary Coburn of EtherDelta. He was accused of “operating an unregistered securities exchange.” Coburn, founder of the cryptocurrency token trading platform, agreed to pay up to $400,000 in fines. This covers an 18-month operating period.

In conclusion

A US citizen, Joseph Kim, will serve 15 months in jail and must pay a $1.1 million fine after he misappropriated Litecoin and Bitcoin from private investors. Authorities have permanently banned him from trading and soliciting funds.

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