The Commission on trade commodity futures (CFTC) for organizing a fraudulent scheme with bitcoin and Litecoin trader sentenced to prison and ordered him to pay a fine of more than $1 million, according to a press release.

Trader Joseph Kim confessed to defrauding investors of hundreds of thousands of dollars after stealing over $600,000 from a previous employer, who was a Chicago trading firm. The funds in bitcoin and Litecoin were transferred for the period from September to November of 2017.

When the employer asked Kim about the missing coins, he lied about that for security purposes, cryptocurrency exchanges demanded to make transfers to other accounts. After the deception was revealed, he was immediately dismissed from the company.

Soon he was asking for money from ordinary citizens, presumably to continue to trade cryptocurrency for damages to the former employer. As a result, in the period between December 2017 and March 2018 on his cheating got at least five citizens, who gave him about $545 thousand.

As noted in the document, Kim lied that he voluntarily left work to open my own trading company. He also promised to engage in risk arbitrage transactions. But in fact, he performed high-risk operations with cryptocurrencies, which led to the loss of all the investors ‘ funds.

In addition to a fine in the amount of $1.146 million, the Commission permanently barred Kim to engage in trading, including cryptocurrency, and sentenced him to 15 months in prison.

Earlier in the USA have already been such precedents. So, in January 2018 the Commission on trade in commodity futures has filed a lawsuit against the two companies for the organization of fraudulent investment schemes, and embezzlement of depositors ‘ money.