A young cryptocurrency trader has made history as the first to be charged with criminal fraud for allegedly stealing $2 million USD in bitcoin and litecoin from the Chicago trading house he worked for.
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Trader Used Stolen $2 Million BTC and LTC to ‘Cover Losses’
According to Chicago’s ABC7, 24 year-old Joseph Kim appeared in federal court today charged with one count of wire fraud. Kim entered no plea, and was released on a $100,000 bond. He’s prohibited from communicating with former colleagues or trading cryptocurrencies or other assets for third parties. The court also ordered Kim to surrender his passport and travel only between Illinois and Arizona.
Kim arrives at court in Chicago
While there are definitely previous cases of cryptocurrency-related thefts and fraud, federal prosecutors said Kim’s was the first of this nature.
Kim allegedly confessed to the crime in an email sent to his company’s management last November. He siphoned the BTC and LTC from company accounts to his personal ones to cover trading losses, he said, and never intended to steal for personal gain.
Kim worked for the firm Consolidated Trading LLC for 1.5 years. While he had attempted to repay some of the stolen funds, his email suggested he continued to hold and use the balances after this was necessary.
“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,” he wrote. ABC7’s report said Kim thought he was “invincible”, and referred to himself as “DEGEN” — for “degenerate gambler”, a self-deprecatory term traders often apply to their lifestyles.
First Cryptocurrency Fraud, but Otherwise the Crime Is an Old One
However, apart from the fact Kim allegedly used cryptocurrency to fund his trading losses (or gambling addiction), there’s nothing particularly new or novel about his crime.
Stories of traders creating fraudulent structures to cover losses are decades-old and storied — including the legendary “rogue trader” Nic Leeson, who brought down his entire company. And siphoning company funds for personal use has likely been happening for as long as the world has had money and employers to steal it from.
Cryptocurrencies still leave their own form of transaction trail, particularly if they’re passing through registered accounts with third-party exchanges, wallets or employers. Kim’s bosses uncovered his alleged crime in much the same fashion as any other trading house or bank would.
Is cryptocurrency any easier to steal than fiats, or is it exactly the same? Let’s hear your thoughts in the comments.
Images via ABC7 Chicago
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