Crypto Scammer Gambled ‘Investment’ From Friends Claims DoJ

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  • Alleged crypto scammer Douglas Jae Woo Kim faces up to 20 years in prison after fleecing friends of $4.5 million to gamble with
  • Kim borrowed the money under the pretense of investing in a cryptocurrency exchange
  • Three victims have testified against him to date

A crypto scammer gambled away money he had borrowed from friends on the pretext of investing in a cryptocurrency exchange, according to the US Department of Justice (DoJ). The DoJ claims that 27-year-old New Yorker Douglas Jae Woo Kim enticed victims to lend him a total of $4.5 million throughout 2017, representing himself as a cryptocurrency trader and claiming that they were investing in a crypto exchange. Instead, Kim sent the money to cryptocurrency gambling sites and sportsbooks to bet with, and now faces prison if convicted as a crypto scammer.

Crypto Scammer Who Promoted a “Fairly Modest” Operation

The DoJ complaint describes how Kim began his operation in October 2017, having presumably watched Bitcoin’s rapid price increase that year and wanting to profit from it. Kim claimed he was investing in a cryptocurrency exchange in which he and investors would profit from fees charged on the peer-to-peer network and from exchange transactions.

Kim told one victim that the fictitious venture was a “fairly modest operation”, and claimed that $300,000 to $400,000 was already tied up in the gambit. To put the victim at ease he told them that the venture “isn’t very risky to me”, and shortly afterwards secured $200,000 from them. Once the money arrived however, Kim took half and split it between a Bitcoin sportsbook and a cryptocurrency casino located outside the United States, immediately putting him into the category of crypto scammer.

Wire Fraud Charge Could Bring Prison Sentence

Kim repeated this pattern over and over during the following months, convincing friends and acquaintances to part with millions of dollars which he essentially gambled away. The alleged crypto scammer appeared before a federal judge for the first time last week on a charge of wire fraud and will appear again on August 19, 2020. He faces a maximum statutory penalty of up to 20 years in prison and a fine of $250,000 if convicted.