Four Vietnamese nationals were charged in a U.S. court for a series of cyber intrusions causing over million in losses. The defendants, part of the cybercrime group “FIN9,” allegedly hacked U.S. companies from May 2018 to October 2021, stealing non-public information, employee benefits, and funds. They used stolen personal and credit card information to […]
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Cartier Family Member Indicted for Using USDT to Launder Hundreds of Millions in Drug Trafficking Money
Maximilien De Hoop Cartier, a descendant of the family famous for their French luxury goods Cartier, has been indicted for his participation in a network that allegedly used several shell companies to launder drug trafficking money proceeds using USDT. Cartier and five Colombian individuals allegedly conspired to directly launder .5 million and used these shell […]
Bitcoin News
Safemoon Founders Indicted for Fraudulently Diverting Investor Funds
The founders of cryptocurrency Safemoon have been indicted on charges of securities fraud, wire fraud, and money laundering related to the alleged misappropriation of millions of dollars of investor funds. Braden John Karony, Kyle Nagy, and Thomas Smith were charged in an indictment unsealed Thursday in federal court in Brooklyn.
Safemoon Founders Charged With Conspiracy to Commit Securities Fraud
Karony was arrested in Provo, Utah while Smith was arrested in Bethlehem, New Hampshire. Nagy remains at large. According to the indictment, the defendants lied to Safemoon investors about the use of “locked” liquidity and their personal holdings and trading of the token. As Safemoon’s market capitalization grew to over billion, the defendants allegedly diverted millions of dollars worth of “locked” tokens for personal purchases like luxury cars, real estate, and personal investments.
“As alleged, the defendants deliberately misled investors and diverted millions of dollars to fuel their greedy scheme and enrich themselves by purchasing a custom Porsche sports car, other luxury vehicles, and real estate,” said U.S. Attorney Breon Peace in a statement. The U.S. Attorney added:
As fraudsters increasingly use digital assets to mislead investors and misappropriate funds, our Office will be at the forefront of pursuing them and their ill-gotten gains.
The indictment alleges the defendants falsely claimed that locked Safemoon liquidity pools prevented insider “rug pulls” and that the pools would not benefit developers. In reality, the Department of Justice (DOJ) insists defendants allegedly retained access to divert funds for personal gain, buying and selling Safemoon despite claims that they did not hold the token.
“Although this fraud scheme may be complex, the end result is simple — theft,” said IRS Criminal Investigation special agent-in-charge Thomas Fattorusso. “Investors were assured their money would be safe while the defendants allegedly misled investors and diverted millions of dollars to line their pockets and their driveways.”
The charges include conspiracy to commit securities fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. Karony, Nagy, and Smith are presumed innocent unless proven guilty. The case is being handled by the DOJ’s Eastern District of New York’s Business and Securities Fraud Section.
The crypto asset safemoon (SFM) shed more than 11% in value after the DOJ published the news.
What do you think about the Safemoon founders’ indictment? Share your thoughts and opinions about this subject in the comments section below.
Report: Terraform Labs Co-Founder Indicted on Fraud Charges in South Korea
Recent local reports have brought to light that Shin Hyun-seong, also known as Daniel Shin, co-founder of Terraform Labs, has been indicted by the Seoul Southern District Prosecutors’ Office on charges of fraud. Along with nine others, Shin is suspected of deceiving investors and accumulating around 460 billion won (0M) before the Terra project ultimately failed.
Daniel Shin Indicted With 9 Other Terra Associates
KBS World, a regional South Korean publication, has revealed that ten individuals, including Daniel Shin, have been indicted in South Korea. Although they have not been detained, the suspects have been charged with financial law violations, embezzlement, and fraud. The South Korean authorities suspect that this group of individuals raised 460 billion won (0M) through unlawful means linked to the Terra blockchain project.
According to the KBS report, Shin was responsible for supervising terrausd (UST) (now known as USTC) payments for four years, starting from July 2018. Prosecutors have reason to believe that false advertising was utilized during this period. Seven of the ten suspects who were indicted worked for Terraform Labs, while one was Shin’s financial broker. Although the prosecution is aiming to seize 246.8 billion won (4.7M), the process has been far from smooth.
In a recent ruling, the court in Seoul stated that the original Terra asset, now referred to as LUNC, is not a security. As a result, the Seoul prosecutors’ office had difficulty confiscating Daniel Shin’s cryptocurrency assets due to this provision. After eleven months of investigations, the Seoul prosecutors’ office is now bringing the accused to trial. Notably, the indictment report does not mention co-founder Kwon Do-hyeong, commonly known as Do Kwon.
What do you think about Daniel Shin being indicted by the Seoul prosecutors’ office? Share your thoughts about this subject in the comments section below.
Russian Founders of Defi Platform Forsage Indicted in $340 Million Crypto Ponzi Scheme
Four Russians have been charged in the U.S. with operating a crypto pyramid and Ponzi scheme that defrauded investors of millions of dollars. If convicted, they would face a maximum penalty of 20 years in prison for their roles in the purportedly decentralized finance (defi) platform Forsage.
Forsage Founders Charged With Running Cryptocurrency Pyramid
A federal grand jury in the District of Oregon returned an indictment on Wednesday charging the founders of a defi crypto investment platform for what authorities believe to have been a global Ponzi scheme. The entity, Forsage, allegedly raised around 0 million from its victims, according to an announcement by the U.S. Justice Department.
All four indicted — Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maslakov — are citizens of the Russian Federation. Some of them used one or more aliases while aggressively promoting the project through its website and social media as a legitimate, lucrative, and low-risk business opportunity. Sergeev, for example, presented himself as Mike Mooney or Gleb Million.
Forsage was advertised to the public as a decentralized matrix project based on network marketing and smart contracts. In reality, it was set up and run as a Ponzi and pyramid investment scheme that defrauded investors around the world. The defendants are each charged with conspiracy to commit wire fraud. If convicted, they would face up to 20 years in prison.
Court documents suggest that the Russian nationals deployed smart contracts on the Ethereum, Binance Smart Chain, and Tron blockchains. Analysis of the code showed that as soon as someone invested in Forsage by buying a so-called “slot” in a smart contract, the funds were used to pay earlier Forsage investors.
U.S. Attorney Natalie Wight for the District of Oregon emphasized that the indictment is the result of a months-long investigation. “Bringing charges against foreign actors who used new technology to commit fraud in an emerging financial market is a complicated endeavor only possible with the full and complete coordination of multiple law enforcement agencies,” she elaborated.
Blockchain forensics confirmed that over 80% of Forsage investors received fewer ether (ETH) back than they had invested in its Ethereum program. Moreover, at least one smart contract was used to divert investors’ money to cryptocurrency accounts controlled by the founders.
Forsage was launched online in January, 2020. The indictment of the Russians comes after in August, last year, the U.S. Securities and Exchange Commission (SEC) charged 11 people, the four co-founders and seven promoters of the platform, for their participation in creating and promoting the fraudulent crypto pyramid and Ponzi scheme.
What are your thoughts on the Forsage case? Let us know what you think about the subject in the comments section below.
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