In a comprehensive new report, Crystal Intelligence, a blockchain analytics firm, details a significant billion in losses due to cryptocurrency crimes over the past thirteen years. The study covers a timeline from June 19, 2011, to March 6, 2024, and delves into the various types of criminal activities within the digital currency space. Study […]
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Expert Calls for Full Cryptocurrency Regulation in Nigeria to Mitigate Digital Asset-Related Financial Crimes
Nigeria must fully regulate crypto activities if it wants to curb financial crimes associated with digital assets, a forensic expert has said. The co-founder of A&D Forensics also called on Nigeria to enact laws that would mandate banks to vet service providers before granting them account access. Curbing Crypto-Related Financial Crimes According to a blockchain […]
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Crypto Crimes Highlighted in IRS Criminal Investigation’s 2023 Top 10 Criminal Cases
In the IRS’s list of top 10 criminal cases for 2023, cryptocurrency frauds are featured, ranging from multi-million dollar tax evasions to elaborate money laundering schemes.
Crypto Scams Among Most Significant Financial Crimes in IRS Criminal Investigation’s 2023 Report
The IRS Criminal Investigation (CI) division has released its annual list of the top 10 criminal cases for the year 2023, highlighting a significant focus on cryptocurrency-related crimes. The list, which was announced on the IRS website and IRS CI’s social media platforms, includes a variety of financial crimes ranging from international tax fraud to massive Covid-19 relief scams.
CI Chief Jim Lee underscored the range and complexity of this year’s cases, emphasizing the billions of dollars involved and the global impact of these crimes. “From international tax schemes to multi-level marketing involving cryptocurrency, our investigators have skillfully unraveled some of the most intricate financial frauds,” said Lee.
Among the top 10 cases, four are notably centered on cryptocurrency:
Amir Bruno Elmaani Sentenced in Crypto Tax Evasion: Coming in at number 8 on the IRS CI list is a man known as ‘Bruno Block,’ the founder of the cryptocurrency Oyster Pearl. Elmaani was sentenced to 48 months in federal prison. He was found guilty of evading taxes on profits from his Pearl tokens, leading to a tax loss of approximately .5 million. Elmaani’s lavish spending, including the purchase of yachts and homes, contrasted sharply with his reported income to the IRS.
Silk Road Bitcoin Seizure Leads to Conviction: Number 7 on the IRS CI list is James Zhong, who received a sentence of one year and one day for wire fraud related to the illicit acquisition of approximately 50,000 bitcoins from the infamous Silk Road dark web marketplace. The forfeiture of these bitcoins, valued at around .4 billion, marks one of the largest in history. Zhong’s elaborate scheme to conceal the stolen bitcoins spanned over a decade.
Bitcoin ‘Money Laundering’ Scheme Uncovered in New Hampshire: At Number 4 in the overall list is Ian Freeman. Freeman was sentenced to 96 months in prison for allegedly laundering over million through bitcoin transactions. Freeman’s operation was accused of catering to fraudsters, bypassing anti-money laundering laws and misrepresenting transactions as church donations.
Onecoin Co-Founder Sentenced in Multibillion-Dollar Scheme: Finally, at number 3 is Karl Sebastian Greenwood, co-founder of Onecoin, who was sentenced to 20 years in prison for his role in the Onecoin fraud scheme. The scheme, which started in 2014, defrauded millions of investors worldwide, with losses exceeding billion.
These high-profile cryptocurrency cases reflect the increasing scrutiny by law enforcement agencies on the use of digital currencies in criminal activities. The IRS CI’s focus on these cases demonstrates the agency’s growing proficiency and interest in investigating complex financial crimes that are natively digital.
The other cases on the list include international tax fraud, Covid-19 relief scams, and a billion-dollar biofuel tax fraud scheme, showcasing the variety of financial crimes tackled by the IRS CI in 2023.
As cryptocurrency becomes more prominent in society, it stands to reason there will be a commiserate uptick in crypto-related crimes. The IRS CI cases serve as a stark reminder of the potential for misuse and the importance of vigilance amongst crypto holders. These cases also serve as fodder for people and institutions demanding stronger regulations and oversight over all things crypto.
What do you think is the significance, if any, of the number of crypto-related cases in IRS CI’s top 10 list? Let us know in the comments section below.
Sam Bankman-Fried’s Attorney Paints Picture of Mistakes, Not Crimes, in Closing Argument
Sam Bankman-Fried’s lawyer Mark Cohen gave a final argument Wednesday, portraying the FTX founder as someone who “did his best” and made mistakes but did not commit crimes.
Bankman-Fried’s Lawyer: ‘Mistakes Are Not a Crime’
Sam Bankman-Fried‘s attorney, Mark Cohen, is well-known for representing convicted sex offender Ghislaine Maxwell. This year, he is defending the former FTX chief. After a series of witnesses and testimony from Bankman-Fried himself, Cohen delivered his closing argument to the courtroom jurors.
“Mistakes are not a crime. Why does the government get to speak twice? Because they have the burden of proof,” Cohen told jurors in his closing statement. He said the government tried to turn Bankman-Fried into “some sort of monster” but had not shown criminal intent. Cohen’s closing statements were streamed on the social media platform X by Matthew Russell Lee of Inner City Press
Cohen acknowledged there was a “messy truth” to how Bankman-Fried and his cohorts ran FTX but said he was innovative in building a “legitimate business.” He portrayed the collapse of FTX as a liquidity crisis and not a Ponzi scheme.
“People suffered losses is not the question,” Cohen said. “Sam didn’t have to testify. The government was unfair. If he answered too long, they said it was too long. Same for short. If he tried to explain, they said he was being evasive. It’s heads I win, tails you lose.”
The lawyer added:
Unlike the government’s witnesses, Sam was far from polished. He couldn’t remember everything he said to Congress. No one can know that. If he’s the criminal mastermind they say he is, why did he speak to Congress?
Cohen attacked the credibility of prosecution witnesses who took plea deals, saying they shifted blame to Bankman-Fried to get sentencing reductions. He said the widespread code access and transfers between FTX and Alameda were not secret crimes but part of a young, undisciplined company trying to innovate.
The defense lawyer cited private chats and emails to contend Bankman-Fried was discussing rescues for FTX up until the end. “Ask yourself, if you’re a fraudster, why would you repay the lenders, and not just take the money and run?” Cohen asked.
In conclusion, Cohen portrayed the case as “a difference in business judgment” and not criminal behavior. He acknowledged that “some decisions turned out very poorly” but maintained that Bankman-Fried told the truth. “Sam acted in good faith, he didn’t want to defraud. Find him not guilty,” Cohen implored the jury.
What do you think about Sam Bankman-Fried’s defense? Share your thoughts and opinions about this subject in the comments section below.
Fiat – Not Crypto – Still The Top Choice For Financial Crimes, US Treasury Says
Fiat, a government-issued currency, is still the best choice of financial criminals.
Concerns have always centered on the possibility of crypto assets being used for nefarious reasons, however the US Treasury department just released something that dispels these anxieties.
Despite widespread fears that cryptocurrency could be used for criminal purposes, a newly published report by the US Treasury indicates that the bulk of financial crimes are still committed using fiat money.
The US Treasury presented a three-year report on money laundering, proliferation financing, and terrorist financing early this month. And they were all based on digital assets.
And crypto detractors may believe this is all about digital assets being widely employed in these sectors.
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It’s Fiat, Not Crypto
Nevertheless, fiat currencies and traditional money are still more often utilized in this circumstance, thus they are more likely to come into play.
The Treasury’s findings include a detailed discussion of virtual currencies, stating that both their user base and market capitalization have expanded dramatically since the previous risk assessment in 2020.
However, these reports found that criminal flows via fiat currency and established networks continue to outnumber those involving cryptocurrency.
Crypto total market cap at .805 trillion on the daily chart | Source: TradingView.com
The US Treasury disclosed the following:
“The use of crypto assets for money laundering continues to be significantly less prevalent than the use of fiat cash and other more traditional means.”
Crypto Still A Good Choice For Crime
According to the National Money Laundering Risk Assessment, “virtual assets” are an ever-evolving domain within money launderers’ expanding armory for concealing their finances.
It singled out DeFi and “anonymity augmenting technology” as possible perpetrators.
Throughout the pandemic, virtual assets have apparently been used extensively in phishing assaults and ransomware scams.
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Shady operators may use pledges of profit from the unpredictable cryptocurrency market to entice victims into disclosing personal information or infecting their devices with viruses.
The attackers may then demand payment in crypto following the attack, which is both pseudonymous and irreversible.
In a recent Chainalysis Crypto Crime Report, many criminals use over-the-counter brokers to launder their cryptocurrencies.
OTC brokers are individuals or businesses that assist transactions between buyers and sellers who do not wish to (or are unable to) conduct business on a cryptocurrency exchange.
A Staggering Amount
Meanwhile, a United Nations report says that money laundering costs the global economy between 0 billion and trillion per year.
This equates to between 2% and 5% of gross domestic output. Today, almost 90% of money laundering remains undetected.
However, technological advancements have led in the development of more effective tools. Criminals continue to use these advancements to move dirty money.
Simultaneously, government agencies and fintech firms utilize technology to identify transaction characteristics and assist in exposing fraud.
Featured image from India Today, chart from TradingView.com
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n nn nn CipherTrace, a blockchain analytics company, is partnering with the Republic of Maltas sole financial regulatory agency to ensure that all crypto transactions within the country are free of money laundering and other similar financial crimes.As the Times of Malta reported on March 11, 2019, the Malta Financial Services Authority MFSA has enlisted the help of U.S.-based company CipherTrace to audit cryptoasset services that operate within Maltas jurisdictio
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