BitMEX is one of the worldâs largest cryptocurrency trading platforms. On August 10, 2021, the U.S. District Court for the Southern District of New York entered a Consent Order that the U.S. Commodities Futures and Trading Commission agreed to with five companies charged with operating BitMEX. The order required the BitMEX entities to pay a $100 million civil monetary penalty. See here BitMEX is owned and operated by HDR Global Trading Limited, which is registered…
The U.S. Department of Justice (DOJ) has charged two California men in Los Angeles federal court with defrauding investors of more than $22 million in what DOJ describes as the largest non-fungible tokens (NFT) scheme it has ever prosecuted. View the indictment here. Both defendants, aged 23 and hailing from Thousand Oaks, California, were charged with defrauding investors of over $22 million through a series of NFT rug pulls. The term “rug pull” refers to…
We previously reported on the indictment of Shakeeb Ahmed. According to the charging documents and other filings and statements made in court, the facts were as follows: In July 2022, Ahmed carried out an attack on a cryptocurrency exchange, the Crypto Exchange, by exploiting a vulnerability in one of the Crypto Exchangeâs smart contracts and inserting fake pricing data to fraudulently cause that smart contract to generate approximately $9 million dollars’ worth of inflated fees…
On July 11, 2023, the Unites States Attorney’s office for the Southern District of New York announced that it had arrested Shakeeb Ahmed and charged him with wire fraud and money laundering in connection with his attack on a decentralized cryptocurrency exchange (the âCrypto Exchangeâ). Although the indictment did not identify the exchange, based on the facts described in the indictment, it has been reported that the hack was against Crema Finance, a decentralized cryptocurrency platform…
On November 20, 2022, two Estonian citizens were arrested in Tallinn, Estonia on the basis of an indictment returned by a grand jury in the Western District of Washington. The indictment against Sergei Potapenko and Ivan TurĂ”gin contains 18 criminal counts including: conspiracy, wire fraud, and conspiracy to commit money laundering. The two are alleged to have defrauded hundreds of thousands of would-be investors in a virtual currency bank as well as fraud in connection…
On November 7, 2022, the US Attorney for the Southern District of New York announced that James Zhong (“Zhong”) plead guilty to one count of wire fraud for stealing over 50,000 Bitcoin (valued at the time of seizure at over USD 3.36 billion) from the now defunct Silk Road dark web marketplace. Zhong has not yet been sentenced but could face a maximum of 20 years in prison. This marks yet another major victory for…
In yet another example of the United States government’s commitment to investigate and prosecute crimes involving cryptocurrency, two men from Massachusetts were sentenced on October 19, 2022 for their creation of a scheme with the intent to steal cryptocurrencies from high-profile executives in the crypto community as well as gain access to their social media accounts. Both of the men received sentences of slightly over two years in prison. The two men employed a simple,…
An earlier post discussed that BitMEX, one of the worldâs largest cryptocurrency trading platforms, entered a Consent Order with the U.S Commodities Futures and Trading Commission under which it agreed to pay a $100 million civil monetary penalty. Subsequently, in February 2022, two BitMEX co-founders, Arthur Hayes and Benjamin Delo, pled guilty to violating the BSA in February 2022. On March 9, 2022, the third co-founder, Samuel Reed, pled guilty to violating the Bank Secrecy…
On February 8, 2022, the U.S. government arrested Ilya Liechtenstein and Heather Morgan and charged them with conspiracy to launder the proceeds of 119,754 Bitcoin which had been stolen from cryptocurrency exchange Bitfinex in a 2016 hack. The present value of the theft is approximately $4.5 billion and the U.S. government has seized approximately 94,000 Bitcoin thus far. The seized Bitcoin is valued at $3.6 billion and represents the DOJ’s largest ever cryptocurrency seizure. The…
On June 24, 201, the United States Department of Justice brought a criminal bill of information against Michael Yusko III. According to the DOJ, under U.S. federal law, any business that engages in âthe acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any meansâ is deemed to be a money…