New York Man Who Ran $7-Million-Dollar Cryptocurrency Investment Scheme Sentenced To Four Years In Federal Prison

SAN FRANCISCO – Douglas Jae Woo Kim was sentenced today to 48 months in federal prison for his scheme to defraud investors of over $7 million in cryptocurrency and other funds.  Senior U.S. District Judge Charles R. Breyer handed down the sentence.

At the conclusion of a three-week trial in February 2025, a federal jury convicted Kim, 32, of New York, New York, on 14 counts of wire fraud, international money laundering, and money laundering, and acquitted him on one count of international money laundering.  At today’s sentencing hearing, Judge Breyer dismissed one count of laundering of monetary instruments, one of the 14 counts on which Kim had been found guilty, on venue grounds.  

According to court documents and evidence presented at trial, between October 2017 and June 2020, after moving to San Francisco, Kim engaged in a scheme to defraud investors, many of whom were friends and acquaintances, of over $7 million in money and cryptocurrency by holding himself out as a legitimate trader of cryptocurrency.  Kim falsely represented that he was seeking short-term liquidity in the form of loans or investments for cryptocurrency trading or other legitimate business purposes, told victims that the loans carried no risk or very low risk, promised high rates of return on their loans, and claimed that he had sufficient funds to personally guarantee the loans.  

In October 2017, Kim contacted a victim by text message and said he was looking for investors interested in making what he called a short-term loan for a “fairly modest operation.”  Kim represented that he was investing in a cryptocurrency operation in which he would make a profit from fees charged to a peer-to-peer network and from exchange transactions, and informed the victim that the operation “isn’t very risky to me.”  Kim obtained over a million dollars’ worth of funds from this victim over the course of the scheme, the majority of which went to offshore sports betting sites.

In November 2017, Kim contacted another victim by email and said he was looking for cryptocurrency for a trading strategy.  Kim assured that the victim that “my activities are fairly low risk.”  In total, Kim obtained over $500,000 in funds from this victim, most of which he sent to offshore sports betting sites.

In an agreement dated Jan. 1, 2018, Kim set out the terms of a similar investment with a third victim.  The agreement called for the victim to provide cryptocurrency valued at approximately $200,000 at the time.  The same day, Kim converted more than half of the funds to bitcoin and, in the following days, transferred substantially all the converted cryptocurrency to his account with an offshore casino.  Kim went on to obtain over $4 million in funds from this victim.

Kim defrauded numerous other victims, including nine who testified at trial, until at least July 2020, when he was charged by federal complaint.

United States Attorney Craig H. Missakian and FBI Special Agent in Charge Sanjay Virmani made the announcement.

In addition to the prison term, Judge Breyer sentenced Kim to a three-year period of supervised release.  A hearing will be scheduled to determine issues regarding restitution.

Assistant U.S. Attorneys Noah Stern and Maya Karwande are prosecuting the case with the assistance of Veronica Hernandez, Maryam Beros, Andy Ding, Lynette Dixon, and Christine Tian. The prosecution is the result of an investigation by the FBI and IRS Criminal Investigation.