New Yorker charged with $ 4.5 million BTC and ETH fraud


The New Yorker is accused of tricking investors into transferring him the equivalent of $ 4.5 million in cryptocurrencies, which he used to bet on offshore gambling sites.

According to a criminal case opened by the US Attorney’s Office, Douglas Jae Woo Kim, who lives in New York, has fraudulently obtained from three investors BTC and ETH worth more than $ 4.5 million.

The Department of Justice claims that Kim pretended to be a cryptocurrency trader and asked for loans for low-risk investments, in which, he said, he had already invested from $ 300,000 to $ 400,000. 

After receiving the funds, Kim sent either all of them or a substantial amount to offshore cryptocurrency-backing gambling sites Nitrogen Sports and Fairlay, according to the prosecutor’s office.

Between October 2017 and May 2020, Kim convinced three investors to transfer 123 BTC to him, equivalent to approximately $ 1.1 million, 15,252 ETH worth approximately $ 3.5 million, and approximately $ 30,000. 

Although Kim promised that investors will receive back not only loans, but also high interest on them, the Department of Justice says that most of BTC and all ETH will not be easy to repay.

At the moment, only one investor has managed to return his funds. According to the testimony received by the FBI, none of the investors suspected that their money was being used on the playgrounds. 

Kim has been charged with electronic fraud by the Justice Department. He appeared in court this week and if convicted, he faces up to twenty years in prison and a fine of $ 250,000.

Recall that recently, the US Federal Bureau of Investigation (FBI) arrested a group of fraudsters from Nigeria who lured $ 17.5 million in bitcoins from two Chicago firms, posing as accountants. 

In addition, the other day the US Department of Justice accused a Texas resident of illegally receiving social benefits for employers in the amount of $ 1.1 million, which he spent on the purchase of cryptocurrencies

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