According to officials, the man was arrested on charges of wire-fraud involving a cryptocurrency scheme that left investors $4.5 million short. The case was reported by the U.S. Attorney’s Office of the Northern District of California.
Based on the official statement which contains the complaint, Kim introduced himself as a crypto trader to friends and asked for funding, promising to drive a return on investment. Once in possession in the plaintiffs' funds, Kim would transfer the money across to online gambling websites.
In one case, Kim told a victim that he had managed to secure an estimated $300,000 – $400,000 in net profit from running a similar operation in the past. According to investigators, Kim quickly cashed out the money that victims forwarded to him and sent them to a sportsbook and casino website outside of the United States.
If Kim is found guilty of running the scheme, he might face up to 20 years in prison. His gambling addiction, if proven, would be one way to lessen the potential sentence.
While the case is disturbing and raises a few red flags, it also indicates how KYC and AML practices in crypto casinos should be on par with the traditional industry.
Therefore, players are advised to only play at trusted crypto casinos such as BitStarz and Bitcasino.io, or one of FunFair's licensed brands, including CasinoFair, to help the industry establish higher standards across the board.
There have been many documented cases of fraud in the crypto industry and that's why sticking to the trusted and established communities is always best.
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