Chicago Business Litigation Lawyer Blog
Although bitcoin’s meteoric rise in price and prominence has some people wondering if it’s a bubble, the Chicago Mercantile Exchange and CBOE Futures Exchange agreed to start trading in the digital currency in December. Just a few months later, the first criminal lawsuit over bitcoin was filed against a Chicago trader.
At 24 years old, Joseph Kim, who was working as an Assistant Trader for a Chicago firm called Consolidated Trading, was accused of stealing $2 million from his employer from September to November of 2017 – right before bitcoin became eligible for trading in the local exchanges. In fact, it may have been the preparation for trading on the exchanges that alerted the firm to Kim’s alleged illegal activity.
According to the complaint, Kim allegedly funneled millions of dollars in the form of bitcoin and Litecoin from the firm’s funds into his possession. He allegedly used the digital currency to cover his personal trading losses, then lied about the funds to cover up his illegal activities. The firm’s management discovered Kim’s alleged misappropriation of their funds and charged him with fraud.
A short hearing was recently held regarding the allegations of stolen digital funds. Kim was charged with wire fraud, but he has not yet entered a plea. His bond was set at $100,000, and if he gets released on bond, he is not allowed to travel outside of northern Illinois, except to Arizona, where he owns a home. The bond deal also prohibits him from communicating with his former co-workers. Kim agreed to all terms of the bond deal and readily surrendered his passport.
Bitcoin is not a centralized currency, which means it is not regulated by a central authority. Rather, as a digital currency traded internationally, users of bitcoin are subject to the laws and regulations of their own country. Despite the currency’s continued rise to prominence, many countries remain suspicious of it. Some have banned it altogether, while others have placed heavy restrictions on its use by their citizens.
So far, the U.S. has not taken a firm stand either way on digital currency, although with the ability to trade bitcoin on the Chicago Mercantile Exchange and the CBOE Futures Exchange, we may see an increase in U.S. governmental regulations of bitcoin, Litecoin, and other digital currencies.
Using bitcoin to pay for goods and services has its advantages and disadvantages. On the one hand, the transaction fee that merchants charge for using bitcoin tends to be lower than the transaction fee for using a credit card (2%-3% for a credit card, compared to 0%-2% for bitcoin).
On the other hand, transaction times tend to be significantly slower for bitcoin than for credit card, since most merchants hire bitcoin payment service providers to accept the payment on their behalf, transfer the funds into local currency, and deposit them into the merchant’s account. Some users have also become wary of paying in bitcoin due to its volatility. Since the price of bitcoin has been known to skyrocket in the past, many people are afraid of losing out if this happens again after they’ve handed over their bitcoin to a merchant in exchange for goods or services.
As a result of these disadvantages to accepting bitcoin, certain online merchants have stopped accepting payment in the form of bitcoin, although other merchants are continuing to add it as a payment option.
Super Lawyers named Illinois commercial law trial attorney Peter Lubin a Super Lawyer and Illinois business dispute attorneys Patrick Austermuehle and Andrew Murphy Rising Stars in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois business trial lawyers have over thirty years of experience in litigating complex class action, copyright, noncompete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes. Our Lake Forest and Hinsdale business dispute lawyers, civil litigation lawyers, and copyright attorneys handle emergency business lawsuits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist Chicago and Oak Brook area businesses and business owners who are victims of fraud. You can contact us by calling at 630-333-0333. You can also contact us online here.