US Regulator Fines and Suspends Former Banker for Mining Bitcoin
By CCN Markets: A former investment banker has been slapped with a fine and a suspension by self-regulatory body Financial Industry Regulatory Authority (FINRA) for mining Bitcoin.
According to the regulator, Kyung Soo Kim pursued outside business activity in December 2017 without giving his former employer a written notice. Kim is an ex-employee of Bank of America-owned broker-dealer Merrill Lynch, Pierce, Fenner & Smith Inc.
FINRA claims Kim’s bitcoin mining venture was a violation of its rules. The rules prohibit members from serving as an ‘employee, independent contractor, sole proprietor, officer, director or partner of another person’ outside of their employer.
FINRA to members: no moonlighting [including bitcoin mining] under any circumstances
Additionally, members are prohibited from being ‘compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship’ with their employer. Kim was discharged from his duties by Merrill last year in March.
Specifically, Kim is accused of forming a firm known as S Corporation for the purposes of mining Bitcoin and other cryptocurrencies. Kim will serve one-month suspension that will see him barred from associating with any FINRA member firms during that period. He will also pay a fine amounting to $5,000.
Given that he formed his cryptocurrency mining firm in late 2017 at the height of the Bitcoin boom, it is hard to argue that Kim had not been taken in by the prevailing excitement then and didn’t want to miss out on what looked like a bull run that would never end.
Everyone wants to mine bitcoin…
The punishment meted out to Kim for cryptocurrency mining may seem moderate compared to others who have suffered worse fates albeit under different circumstances.
Just last month it was reported that an Australian man was facing a ten-year prison sentence for mining cryptocurrencies on government computers. That’s a high price to pay considering that he had only mined cryptocurrencies worth $9,000.
Late last month a 61-year-old woman received a four-month jail sentence for stealing electricity with a view of mining bitcoin. The woman, Qiuping Tang, was also slapped with a $1,500 fine after a lawsuit was filed by the offended power utility.