Feds Arrest Trader Who Took Employer’s Crypto Funds For Forex Futures Dealing

Crime, News | February 16, 2018 By:

A 24-year-old trader is being charged with fraud for siphoning cryptocurrency from his employer’s account.

Federal prosecutors have charged Joseph Kim for taking $2 million in bitcoin and Litecoin from his employer, Chicago’s Consolidated Trading LLC. Kim allegedly transferred funds to his own personal accounts, then transferred some back when the theft was discovered in an attempt to cover-up the crime.

Kim is on the docket to make an initial court appearance on Friday at 10:30 a.m. before U.S. Magistrate Judge Daniel G. Martin at the Dirksen Federal Building. Prosecutors will provide details on the crime, which involves trading cryptocurrency futrues on foreign exchanges.

Prosecutors are expected to outline the charge that “from September through November 2017, Kim transferred more than $2 million of the trading firm’s bitcoin and Litecoin to personal accounts to cover his own trading losses, which had been incurred while trading cryptocurrency futures on foreign exchanges.”

Lawmen are calling it the first cryptocurrency prosecution in Chicago, and noted that Kim thought he was “invincible” in his actions. He referred to himself as DEGEN in his online communities, which prosecutors claim is short for “degenerative gambler.”

Kim, a 2016 University of Chicago graduate, owned up to the scheme in a November email to his bosses. “It was not my intention to steal for myself,” the email stated. “Until the end, I was perversely trying to fix what I had already done.”  He added: “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 apologized to his bosses, noting to the firm’s top executives, “Sorry to betray you all like this.”

Consolidated’s management team discovered the misappropriation, according to the complaint.  A request for comment from the firm has not generated a response as of publication.