Chicago Trader Charged With Fraud Over Bitcoin Scheme: Feds

CHICAGO — A Chicago currency trader has been accused of misappropriating more than $2 million worth of Bitcoin and another cryptocurrency, Litecoin. According to the Department of Justice, the case is the first criminal prosecution in Illinois involving the cryptocurrency trading industry.

Joseph Kim, 24, of Chicago, was charged with one count of wire fraud in a criminal complaint stemming from an investigation into his activities last fall. The FBI said he defrauded the trading firm he worked for, at one point having withdrawn more than $3.2 million worth of Bitcoins from the company, and then lied about it.

At the time, Kim worked as an assistant trader for the Chicago-based Consolidated Trading. The firm had only recently started trading in cryptocurrency, according to the complaint.

Feds allege Kim misappropriated at least $2 million worth of the firm’s Bitcoin and Litecoin cryptocurrencies for his own personal benefit from September through November 2017. When management started asking about it, he tried to cover it up, according to an FBI affidavit.

Prosecutors allege Kim was covering up his own trading losses he incurred while trading cryptocurrency futures on foreign exchanges.

According to the complaint, his managers discovered Kim's fraud in late November and the FBI launched its investigation.

In a Nov. 29, 2017 email, Kim told his bosses he never intended to steal from the company for personal gain, explaining he was "perversely" trying to fix the damage he had done, according to the complaint.

"You have every apology I have to give, I am sorry to betray you all like this," he allegedly wrote.

If found guilty, Kim could be sentenced to a maximum of 20 years in prison.

Read the complete federal complaint: