DOJ recommends harsher sentences AI-enhanced crimes

Using AI to plan, commit, or help cover up a plan could lead to harsher sentencing in the US soon.

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Tether has redistributed $108.8M in USDT from illicit activity since 2014

The most recent seizure of $5 million USDT from pig-butchering scams marks a significant victory in the ongoing fight against cyber fraud, according to Tether.

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Trump wont sell US BTC if elected, what about seized assets?

Questions abound concerning the Bitfinex and Silk Road funds if Trump is re-elected.

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BitMEX pleads guilty to Bank Secrecy Act violation

BitMEX co-founders Arthur Hayes, Benjamin Delo, and Samuel Reed pleaded guilty to similar criminal charges in 2022 and received probation.

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Two brothers manipulated Ethereum protocols to steal $25M Justice Dept

U.S. officials alleged the individuals engaged in a first-of-its-kind manipulation of the Ethereum blockchain by tampering with its protocols over validating transactions.

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US Justice Dept charges Roger Ver with tax fraud

The early crypto investor, often called Bitcoin Jesus, faces extradition to the U.S. after being charged with evading nearly $50 million in taxes.

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Crypto mixing is not a crime, says CryptoQuant CEO

The arrest of the founders of Samourai Wallet led to widespread concerns in the crypto community that the U.S. government was attempting to crack down on the industry.

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Former FTX CEO Sam Bankman-Fried Faces New Bribery Charges for Alleged Crypto Payment to Chinese Officials

Sam Bankman-Fried (SBF), the former CEO of FTX, now faces a 13-count indictment as U.S. officials have added new charges. One of the new charges alleges that SBF leveraged $40 million to influence “one or more Chinese government officials.” Details of the Bribery Charges Against Sam Bankman-Fried Sam Bankman-Fried (SBF), the co-founder and former CEO [...]

The post Former FTX CEO Sam Bankman-Fried Faces New Bribery Charges for Alleged Crypto Payment to Chinese Officials appeared first on Crypto Breaking News.

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US DOJ Drops Sam Bankman-Fried’s Campaign Finance Charges

The DOJ has dropped political contribution charges against SBF.

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US Man Pleads Guilty to Defrauding Banks and "Leading Crypto Exchange" of over $4M

Twenty-six-year-old Esteban Cabrera Da Corte, the leader of a Miami crew, has pleaded guilty to defrauding US banks and “a leading cryptocurrency exchange” of over $4 million through fraudulent reversals. US prosecutors on Wednesday said Da Corte deployed false and stolen identities to perpetrate the scheme.

According to Damian Williams, the US Attorney for the Southern District of New York, Da Corte and his co-conspirators in around March 2020 opened various accounts with an unnamed crypto exchange using fake US passports, drivers’ licenses and stolen personally identifying information. These accounts were then linked to bank accounts operated by Da Corte and his crew.

How the Scheme Was Run: DOJ

Furthermore, the Department of Justice (DOJ) in the statement explained that Da Corte and his crew bought cryptocurrencies from the crypto exchange using cash deposited into the bank accounts via Automated Teller Machines (ATMs). However, this purchase of cryptocurrency was immediately transferred to other digital assets wallets outside the exchange and controlled by the crew.

After this process, the prosecutors alleged that Da Corte and his team started to make phone calls to their US bank account providers, falsely claiming that the cryptocurrency transactions were unauthorized. As a result of their claims, the banks reversed the purchases, prosecutors said.

“The operation of this scheme by the Defendants resulted in US banks processing more than $4 million in fraudulent reversals and the Cryptocurrency Exchange losing more than $3.5 million worth of cryptocurrency,” DOJ added.

Man Faces Up to 20 Years in Prison

As a result of Da Corte’s guilty plea to a count of conspiracy to commit wire fraud, he now faces up to 20 years in prison, prosecutors said, adding that the crew leader has agreed to pay approximately $3.6 million in restitution. He has also agreed to forfeit $1.2 million.

“Our Office will continue to work vigorously with our law enforcement partners to protect the integrity of U.S. banks and financial markets to the full extent of the law from those who seek to enrich themselves through fraud and deceit, including those who attempt to shroud themselves in the anonymity of digital transactions,” said Williams.

FMA flags fraudulent broker; new FX pairs on Admirals; read today's news nuggets.

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What criminal charges for Celsius ex-CEO mean for crypto industry

The former CEO of the troubled crypto lender faces multiple charges of fraud and market manipulation as U.S. regulators eye crypto market overhaul.

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US Justice Department to double its crypto team, target ransomware crimes

The United States Department of Justice (DoJ) has said it will double the number of staff on its crypto crime team, established two years ago. The unit will grow the number of acting prosecutors more than twice, and get a new leader.  On July 20, the DoJ published the remarks, made by Principal Deputy Assistant [...]

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2016 Bitfinex Hack: Couple Charged over $4.5B in Stolen BTC Strikes Plea Deal

American rapper, Heather ‘Razzlekhan’ Morgan, and her husband, Ilya Lichtenstein, have entered into a plea agreement with US prosecutors, according to a court document seen by Reuters. The couple was first arrested in February 2022 for allegedly laundering cryptocurrency worth $4.5 billion stolen via a hack of the digital asset platform, Bitfinex, in 2016.

US Couple Enters Plea Agreement

According to Reuters, the pair will appear before Senior Judge Colleen Kollar-Kotelley in Washington on August 3, 2023, for a plea hearing. In its action last year, the Department of Justice (DoJ) charged the couple with conspiracy to commit money laundering and defraud the United States.

In August 2016, hackers stole over 119,000 bitcoins from Bitfinex via thousands of unauthorized transactions. The stolen BTCs, which were priced at $71 million at the time, are worth about $3.5 billion at today’s BTC spot market price.

Last year, the DoJ after the arrest of Morgan and Lichtenstein announced that it seized about $3.6 billion in stolen digital assets directly linked to the hack. However, prosecutors are now seeking to have the couple forfeit billions of dollars in assets.

Bitfinex Continues Recovery Efforts

Meanwhile, Finance Magnates reported that Bitfinex has continued to maintain efforts to get back some of the stolen cryptocurrencies. Last month, the exchange received $315,000 in cash and cryptocurrencies from the United States Department of Homeland Security (DHS). The cryptocurrencies were seized by the US Customers and Border Protection, an enforcement agency of the DHS.

Previously, Bitfinex recovered little amounts of the stolen bitcoins. In 2021, the exchange retrieved 6.5 BTC worth $305,000 at the time through its partnership with another crypto trading platform, Poloniex. Similarly, Bitfinex in February 2019 reclaimed 28 BTC worth over $107,000 from the US government.

Meanwhile, a recent report by the Organized Crime and Corruption Reporting Project (OCCRP), a global network of investigative journalists, claimed that Bitfinex never made public a confidential report that found its security lapses responsible for the 2016 hack. Reacting, dismissed the claims, calling them “factually incorrect.”

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US DoJ Accuses FTX Founder of Leaking Caroline Ellison’s Private Diary

US prosecutors have accused Sam Bankman-Fried, the embattled Founder of now-bankrupt cryptocurrency exchange, FTX, of sharing with the media personal documents belonging to Caroline Ellison, his former ally and romantic partner. The Department of Justice (DoJ) made the allegations yesterday (Thursday) in a filing addressed to Lewis Kaplan, the US District Judge presiding over the case between the United States and the ex-CEO of FTX.

US Prosecutors Allege Sabotage

Ellison is the former CEO of FTX’s sister trading firm, Alameda Research. In December 2022, a month after FTX’s collapse, Ellison alongside Zixiao (Gary) Wang, the former Chief Technology Officer of FTX, pleaded guilty to criminal charges initiated by the DoJ. Ellison and Wang also started cooperating with public authorities in their investigation into FTX’s demise.

On Thursday, the New York Times published an article in which it wrote that it reviewed certain Google documents written by Ellison. The documents reportedly contain observations about the personal and professional relationship between the former Alameda Research boss and Bankman-Fried.

The outlet described details in the documents as ‘personal and raw’, adding that the documents illustrate the complexity of the relationship between Bankman-Fried and Ellison. However, the publication did not disclose how it got the document.

In the court filing submitted yesterday, the DoJ attributed the ‘extrajudicial statements’ to Bankman-Fried, noting that the crypto entrepreneur’s lawyers confirmed that the crypto exchange founder met in person one of the reporters credited with writing the article. The lawyers also reportedly admitted that Bankman-Fried shared documents that are not part of the prosecutors’ discovery material with the said reporter. Providing more details, the enforcement agency said it believes that the documents “likely came from [Bankman-Fried’s] personal Google Drive account.”

Furthermore, Damian Williams, the District Attorney for the Southern District of New York, alleged that Bankman-Fried shared the details in order to sabotage Ellison who has agreed to testify at Bankman-Fried's upcoming trial in October that she entered into an arrangement with the Founder to defraud customers and investors as well as Alameda Research's lenders.

“By selectively sharing certain private documents with the New York Times, the defendant is attempting to discredit a witness, cast Ellison in a poor light, and advance his defence through the press and outside the constraints of the courtroom and rules of evidence: that Ellison was a jilted lover who perpetrated these crimes alone,” Williams argued.

Additionally, the District Attorney contended that Bankman-Fried with the move attempted to interfere with a fair trial by an impartial jury. He also sought to publicly discredit a government witness.

As a result, DoJ asked the court to issue an order that limits extrajudicial statements by parties and witnesses likely to interfere with a fair trial by an impartial jury. The enforcement agency added that the alleged leakage by Bankman-Fried "could have a chilling effect on witnesses”.

Bankman-Fried Fails to Successfully Dismiss Charges

The new allegation is the latest development in the federal prosecution of the FTX’s Founder following his arrest in the Bahamas last year and subsequent extradition to the United States. Federal prosecutors in the US initially brought eight counts of charges against the disgraced crypto entrepreneur, but later expanded them to 13, Finance Magnates reported.

Some of the charges include conspiracy to commit commodities and securities fraud, violation of US money laundering and federal campaign finance laws, and conspiracy to contravene the anti-bribery provisions of the Foreign Corrupt Practices Act.

Reacting, Bankman-Fried’s lawyers took up the matter at the Bahamas Supreme Court, seeking dismissal of the extra charges. This is even as Bankman-Fried previously pleaded not guilty to all charges.

Furthermore, the former crypto billionaire's legal counsel recently filed pre-trial motions in the United States, requesting that the court dismiss 10 of the 13 charges filed by federal prosecutors. However, Judge Kaplan recently struck out all the motions.

Meanwhile, Finance Magnates reported on Friday that FTX has initiated legal action against Bankman-Fried, Ellision, Wang, and Nishad Singh, the company's former Engineering Director, in an attempt to recover a total of 1 billion USD. The amount is part of a larger sum of money allegedly misappropriated by the executives before the company folded up.

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Federal Investigators Probe Silicon Valley Bank Collapse; SVB and Top Execs Sued by Shareholders

The parent company of Silicon Valley Bank, SVB Financial Group, and two senior executives have been sued by shareholders after SVB’s collapse last Friday. The proposed class action accuses SVB of hiding the fact that interest rate hikes would leave the bank in jeopardy. Additionally, anonymous sources say the U.S. Department of Justice (DOJ) and [...]

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US Justice Department Probes Collapse of TerraUSD: Report

<p>The US Justice Department is investigating the collapsed algorithmic stablecoin TerraUSD, thus raising the possibility of criminal charges against Terraform Labs and its CEO, Do Kwon, who were already <a href="https://www.financemagnates.com/cryptocurrency/sec-charges-terraform-labs-and-ceo-do-kwon-for-securities-fraud/" target="_blank" rel="follow">indicted for civil fraud</a> in the country. </p><p> TerraForm Labs Faces Criminal Investigation in the US </p><p> As the Wall Street Journal reported on Monday, the Federal Bureau of Investigation (FBI) and the prosecutors from the Southern District of New York (SDNY) are involved in the investigation. They have interviewed former employees of Terraform Labs and are seeking to question others. </p><p> None of the agencies officially confirmed the criminal investigation against the collapsed <a href="https://www.financemagnates.com/terms/s/stablecoin/" class="terms__main-term" id="e84b040e-4d12-499b-99bf-8ba75ea058ca" target="_blank">stablecoin</a> issuer. While there are chances of criminal charges following such investigations, the prosecutors can also potentially scrap the probe. </p><p> Civil Lawsuit against Terraform Labs </p><p> Terraform Labs' <a href="https://www.financemagnates.com/cryptocurrency/was-terra-luna-death-spiral-a-result-of-an-inside-job/" target="_blank" rel="follow">algorithmic stablecoin</a>, pegged to 1-to-1 with USD, collapsed last year, sliding almost to zero. It also resulted in a wave of bankruptcies of crypto companies exposed to the project. </p><p> Earlier, the Securities and Exchange Commission (SEC) accused Terraform and Kwon of orchestrating and operating a fraudulent scheme from April 2018 until the project's collapse in May 2022. The lawsuit alleged that the Singapore-based project raised billions of dollars from investors globally by selling a suite of interconnected crypto asset securities, many of which can be categorized as unregistered securities. </p><p> The securities regulator's lawsuit also alleged Kwon misled investors in the company by claiming that the value of the company's cryptocurrency would rise. Further, he falsely claimed that the Soth Korean <a href="https://www.financemagnates.com/terms/p/payments/" class="terms__secondary-term" id="f1d2a713-da14-4a6b-8fcd-e8f360d07f45" target="_blank">payments</a> app Chai is using Terraform Labs' blockchain infrastructure to settle transactions, whereas the startup confirmed in 2021 that it is no longer using Terraform's blockchain technology or digital assets to process its payments. </p><p> The latest report outlined that the investigation of the Justice Department is on a similar track to the charges brought by the US security regulator. </p><p> Meanwhile, the actions of the US prosecutors and regulators against TerraForm Labs and Kwon are among a string of investigations and charges they are facing globally. South Korea already <a href="https://www.financemagnates.com/cryptocurrency/news/south-korea-issues-arrest-warrant-against-terra-co-founder-do-kwon/" target="_blank" rel="follow">issued an arrest warrant against Kwon</a> and also obtained a red notice against him from Interpool, thus putting global law enforcement on the lookout for him. Singapore police also confirmed their ongoing probe against the collapsed stablecoin project. </p><p> Meanwhile, the current whereabouts of Kwon are not known after his disappearance from public view last year. According to the South Korean authorities, he left Singapore last September and reached Serbia with a stopover in Dubai. </p><p> Kwon last appeared in an interview with crypto journalist Laura Shin in October and denied that he was on the run. However, he denied disclosing his location at the time, citing safety. </p> This article was written by Arnab Shome at www.financemagnates.com.

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U.S. DOJ Trying to Block Binance’s Acquisition of Voyager Assets

The SEC's concerns about Binance.US's were previously brushed aside.

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FTX Founder's Lawyers Consider Delaying Criminal Trial

Lawyers representing FTX founder Sam Bankman-Fried have hinted that they may need to delay his criminal trial due to a lack of evidence from the Department of Justice (DOJ). The trial, which is scheduled to begin on October 2, will focus on fraud charges against Bankman-Fried. His lawyers have stated that they are still waiting for a "substantial portion" of evidence to be handed over to them, including evidence from devices belonging to former FTX employees who have pleaded guilty to fraud charges. (Read More)

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Forsage Founders Indicted for Alleged $340 Million "Global Ponzi" Scheme on Ethereum Blockchain

Oregon's federal grand jury indicted Forsage's founders. "Global Ponzi and pyramid scam" investors lost $340 million on the site. (Read More)

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Forsage Platform Founders Indicted in $340 Million Ponzi Scheme

The founders of a DeFi crypto investment platform, Forsage, have been indicted by the federal grand jury in the District of Oregon for running a [...]

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