U.S. charges Chicago trader with stealing bitcoin

[February 16, 2018]  By Jonathan Stempel

(Reuters) - Federal prosecutors on Thursday charged a Chicago trader with wire fraud for allegedly stealing $2.06 million of bitcoin and litecoin from his employer.

Joseph Kim, 24, is the first person facing criminal prosecution in Chicago involving the cryptocurrency trading industry, according to the office of U.S. Attorney John Lausch in that city, which announced the case.

A lawyer for Kim could not immediately be identified.

Prosecutors said Kim, who worked as an assistant trader for Consolidated Trading LLC, transferred bitcoin and litecoin belonging to his employer to his personal accounts to cover his own trading losses, and lied to management about it.

Consolidated has been able to recover only some of the stolen cryptocurrency, resulting in a $603,000 loss, court papers showed.

In an affidavit, a Federal Bureau of Investigation agent quoted from an email that he said Kim sent Consolidated's owners and four colleagues on Nov. 29, admitting to some cryptocurrency transfers while saying he had no intent to steal.

"Until the end I was perversely trying to fix what I had already done," Kim wrote. "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. You have every apology I have to give, I am sorry to betray you all like this."

A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration, in Paris, France, December 8, 2017. REUTERS/Benoit Tessier/Illustration/File Photo

Consolidated did not immediately respond to requests for comment. Lausch's office did not immediately respond to similar requests.

Prosecutors said Kim was expected to make an initial court appearance on Friday morning. He faces up to 20 years in prison.

The case is U.S. v. Kim, U.S. District Court, Northern District of Illinois, No. 18-cr-00107.

(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)

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