The U. S. Attorney’s Office in Chicago has charged a former bond broker with stealing $2 million dollars’ worth of cryptocurrencies and lying about it to cover investment losses.
Joseph Kim, a 24-year-old trader formerly in the employ of Consolidated Trading LLC, has been charged one count of wire fraud by U. S. Attorney John Lausch.
If convicted, Kim could face 20 years in jail for the crime.
What follows is a recounting of the allegations against Kim, whose bail has been set at $100,000 and who was ordered to give up his passport:
Kim is alleged to have transferred cryptocurrencies worth more than $2.8 million entrusted to him by Consolidated Trading into his own accounts.
In September 2017 Consolidated Trading created a cryptocurrency-centric trading unit and transferred Kim, who was an assistant bond trader for the company, to manage the unit.
As he began his new position, Kim informed his bosses that he held previously existing cryptocurrency accounts.
His superiors told him to stop all cryptocurrency trading, even outside of work hours, to eliminate any conflict of interest.
A week after his promotion, Kim is alleged to have personally transferred more than 980 Litecoins with a value of more than $48,000 from a Consolidated Trading account into a personal account.
Consolidated Trading said it detected the unauthorized transfer within days. When supervisors questioned Kim, he claimed that he had to transfer company cryptocurrency funds to his “personal digital wallet for safety reasons” as an “an intermediary holding space.”
Kim’s excuse was that he was having transactional problems with Hong Kong cryptocurrency exchange Bitfinex and that he would transfer the Litecoins to a Consolidated Trading digital wallet of his own creation.
Trail of deceit
An FBI investigation later determined that the Litecoins had never been deposited into any official Consolidated Trading accounts or digital wallets.
In November 2017 Consolidated Trading superiors saw that Kim moved 55 Bitcoins with a value of $433,000 into an unknown financial account, the charges state.
Kim told his superiors that the Bitcoins had been blocked during an earlier transaction and that he had moved the cryptocurrency to another account to fix the problem.
Kim transferred about 27 Bitcoins from Consolidated Trading’s accounts on Nov. 20, 2017. Twenty-eight Bitcoins were still missing as of Thanksgiving weekend 2017.
All in all, Kim is alleged to have stolen about $2.8 million worth of Bitcoins and other cryptocurrencies from Consolidated Trading.
Consolidated Trading since has recovered all but $603,000 of the stolen cryptocurrency.