The CFTC has shown its determination at sanitizing the crypto ecosytem through punitive actions meted out to a crypto trader who stole from his employer. The Commodity Futures Trading Commission (CFTC) incarcerated the Bitcoin broker and fined him over $1 million for running a fraudulent crpyto scheme.
According to a press release issued Friday by the CFTC, the dealer, Arizona resident Joseph Kim confessed to swindling investors of huge sums after misusing more than $600,000 stolen from his past employer.
Between September and November 2017, Kim incurred losses of around $601,000 for his employer, a Chicago-based trading firm after transferring bitcoins and litecoin from his employer’s accounts to his.
He claimed that it had become necessary to make the transfers claiming that it was necessitated by some security concerns.
Apparently not fooled by his assertions, the firm fired Kim after discovering the theft in November 2017. Kim nonetheless insisted that security issues with the crypto exchange required transfers into different accounts when being questioned by his firm concerning missing tokens.
The employee went on to make demands from his former employer’s clients soliciting and taking funds from them for his personal crypto trading activities.
The funds he raised were clearly to keep up with his trading activities with the expectation of making profits to reimburse his ex-employer. He deceitfully acquired roughly $545,000 from five clients in December 2017 through March 2018.
Kim purportedly misled clients that he deliberately left his boss to set up his very own trading firm. He falsely guaranteed he would put funds to use in a trading strategy considered safe. On the contrary, he made high-risk trades and lost a substantial fraction of his clients’ funds.
Notwithstanding a fine of $1,146,000, the CFTC has permanently banned Kim from trading and had him sentenced to 15 months in prison according to a statement from the agency.
James McDonald, Director of enforcement at the CFTC, stated:
“Today’s Order stands as yet another in the string of cases showing the CFTC’s commitment to actively police the virtual currency markets and protect the public interest.”
The move by the agency has been praised as a step in the right direction as regulators work at harmonizing the crypto ecosystem through a regulatory framework.
Even though this has been a challenge because of the uncertainties associated with the knowledge gap associated with the effect on the new industry.