In the past year, many prominent and colorful personalities from the crypto ecosystem have been arrested and arrested. From the arrest of antivirus pioneer John McAfee to filing charges against the executives of one of the world’s largest exchanges, 2020 has not been able to shake the reputation of criminals on cryptocurrencies.
In the first ten months of 2020 Forensic blockchain company CipherTrace estimates losses from theft, hacking, and fraud at a whopping $ 1.8 billionThis is due in part to the rise of various DeFi platforms.
The report suggests 2020 is on track to have the second highest number of losses related to cryptocurrency crime from 2019. when the proceeds of these crimes exceeded $ 4.5 billion.
Let’s take a look at some of the most iconic figures on legal issues this year.
Arthur Hayes disappears on Justice Department indictment
October 1, The US Department of Justice brought criminal charges against BitMEX founder Arthur Hayes and three of his employees for violating the banking secrecy law. To compound the problems, the U.S. Commodity Futures Trading Commission (CFTC) filed a civil lawsuit against Hayes and his company for violating anti-money laundering regulations.
The Hong Kong resident has since gone missing in public and has not yet reappeared. But, luckily for Hayes, he may not be extradited in the near future as the United States and Hong Kong have suspended their extradition deals amid recent political turmoil there.
The Justice Department claimed BitMEX was involved in a number of shady activities and had weak anti-money laundering (AML) and Know Your Customer (KYC) policies that could easily be misused by third parties.
BitMEX has also been accused of running a complex international corporate structure with offices in prime international destinations such as New York, Hong Kong. while claims to be registered and resident in Seychelles.
After the news broke, BitMEX announced the resignation of Hayes as CEO of the company along with technical director Samuel Reed and head of business development Greg Dwyer.
The mysterious absence of ‘Star’ Xu explained
The prominent OKEx exchange received a lot of criticism after suspending cryptocurrency withdrawals on October 16 to prevent customers from withdrawing their cryptocurrency deposits.
Reports came to light indicating the suspension was related to the Chinese co-founder of the exchange, Mingxing “Star” Xuwho was arrested by the local authorities, although the exchange strongly denied it.
After being unavailable for over thirty days, Xu finally appeared in the media on WeChat on November 19. It revealed that it had helped law enforcement agencies investigate the OK Group’s “hidden listing in 2017” where the exchange attempted to partner with an “undisclosed third party company” to make its offerings available to customers all represent the world. Xu said that after investigating his previous trade commitments, investigators finally resolved the matter and granted approval.
After a month, OKEx re-enabled crypto withdrawals on November 27th.
John McAfee’s Spanish cruise ends abruptly
Tech-savvy crypto evangelist and eccentric millionaire John McAfee has always run the cryptocurrency train. In 2017, he proclaimed that Bitcoin would reach a price of $ 1 million or “eat your penis on national television” in 36 months. He withdrew his testimony earlier this year, to the relief of most people.
McAfee was arrested in Barcelona in October by local authorities in connection with tax evasion charges imposed on him by the US government. He was also accused of fraudulently promoting a number of questionable cryptocurrency projects that allegedly profited millions of dollars.
Prosecutors allege that McAfee failed to file its tax returns for four consecutive years despite having raised millions of dollars from consulting, conferences, digital currency investments, etc. According to a statement from the US Department of Justice McAfee has illegally diverted its earnings from various bank accounts and cryptocurrency accounts on behalf of various candidates. He is also accused of failing to disclose a number of expensive assets, including a yacht and real estate.
This isn’t the first time McAfee has come into conflict with the law. He was questioned by police in 2012 after his name was linked to the death of his neighbor, Florida businessman Gregory Faull. In 2019, he was ordered to pay $ 25 million in an unlawful death lawsuit filed by the heirs, but he refused, saying:
“I have not responded to any of my 37 requests in the past 11 years.”
If convicted on the new charges, he faces 30 years in prison.
Santiago Fuentes’ multi-million dollar plan collapses
Spaniard Santiago Fuentes was the operator of a cryptocurrency arbitrage company called Arbistar, where tens of thousands of users invested bitcoin in its arbitrage trading bot. Blockchain research firm Tulip Research reported that the company had raised more than $ 1 billion in Bitcoin since its inception.
The suspicion arose in September when Fuentes alleged that due to a “digital bug” Arbistar’s native trading module had been disabled in some way, wiping out more than a quarter of the company’s funds overnight.
In the course of their investigation, the Spanish authorities discovered that Fuentes had used its crypto-focused team to allegedly facilitate various financial fraud and money laundering cases. Tulip Research has traced some of Arbistar’s recall activity back to a deep web marketplace called “Hydra”.
Fuentes was arrested in October and charged with financial fraud and money laundering. On December 13, attorneys representing 130 former clients said they lost 4 million euros ($ 4.86 million) among the representatives. Spanish media suggested that overall 32,000 people had lost 93.4 million euros.
Matthew Piercey’s daring marine motorcycle vacation
The 44-year-old from Shasta County, California, He was arrested by the FBI on November 16 while attempting to flee the authorities on a jet ski.
Local media reported about it Piercey was able to dodge officers for more than an hour by first accelerating in a truck and then dumping the vehicle on the shores of Shasta Lake, where he used a marine scooter – a mobile underwater device that usually had a top speed of 8 km / h reached the police dodge for 25 minutes under water. He was arrested when he came out.
Police claim Piercey has requested $ 35 million for cryptocurrency mining and other investments through Family Wealth Legacy LLC and Zolla Financial LLC.
The two companies reportedly targeted high net worth investors and received at least $ 50,000 from each client. Piercey reportedly admitted, however, that he had little to no understanding of cryptocurrencies.
He reportedly spent $ 2.5 million made through his plans to renovate two of his homes and pay his credit card bills. He is currently charged with multiple charges of cable fraud, postal fraud, money laundering and witness manipulation. If convicted, Matthew could face life in prison.
Harpreet Singh Sahni is shot down by Indian dogs
Over the years, Sydney-based concert promoter and celebrity Harpreet Sahni has built a reputation as a man who regularly rubbed shoulders with the Australian elite.including former Prime Ministers Tony Abbott and Julia Gillard, former New South Wales Prime Minister Mike Baird, and former cricketer Glenn McGrath.
However, in October, Indian law enforcement officials alleged that Sahni and his close assistants had allegedly defrauded around $ 50 million from customers. He sponsored a program called Plus Gold Union Coin (PGUC) that promised to offer sponsors benefits between $ 5,000 and $ 8,000 per day.
Investors who tipped around $ 7,000 at the PGUC were told they could get more than $ 100,000 in a year. Investors had to sign a 12-month contract in which they could not withdraw their holdings of cryptocurrencies. However, as the popularity of PGUC increased, token holders became suspicious.
The PGUC website was offline for weeks and when the currency crashed there was no option for investors to minimize their losses or withdraw their wealth. The money invested – valued at around $ 50 million – disappeared and all correspondence with customers was suspended.
Sanhi has been in prison for about 24 years now, awaiting sentence.
Conor Freeman’s Million Dollar Bitcoin Strategy
The US Department of Homeland Security Conor Freeman, a Dublin-based IT professional, has been identified as the man behind a robbery that involved more than $ 2 million in cryptocurrency. He was arrested by Homeland Security officials on November 16 and forced to hand over more than 142 bitcoin.
Freeman reportedly worked with a group that had access to victims’ email addresses and phone numbers through various social media platforms. They also had contacts within the telecommunications industry so that they could initiate sophisticated SIM exchange attacks.
This is where a scammer can get a SIM card tied directly to their victim’s cell phone number so they can access a person’s 2FA messages and one-time passwords that are used to verify and approve identities. major financial transactions.
Freeman pleaded guilty to stealing $ 1.92 million worth of cryptocurrency from Emmy winner Seth Shapiro – Producer of The Game Changers, The Chosen One – and illegally an additional $ 250,000 from two other victims, Michael Templeman and Darran Marble.
The whole Plustoken team
In early July this year, the Chinese police arrested 109 people in connection with the Ponzi Plustoken program. Twenty-seven of them – including Chen Bo, Luu Jianghua, Lu Jianghua, Lu Qinghai, Jin Xinghai, Wang Yin, and Zhang Qin – were allegedly the masterminds of the program, while the remaining 82 people arrested had minor roles within the organization.
The Plustoken scam cost more than two million investors around $ 5.7 billion. The China-based project was presented as a cryptocurrency wallet that generated high returns when users bought PLUS tokens at BTC or ETH.
In 2019, key members removed large amounts of cryptocurrencies from the platform. Between February and March, 25,000 BTC was sent to various addresses including bitcoin mixers, and in June 789,534 ETH were transferred from the company’s coffers. However, by the end of the year the entire program had been exposed, and by July 2020 the project had been shot down by Chinese police.
In November, the Jiangsu Yancheng Intermediate People’s Court announced that Authorities had seized 194,775 BTC, 833,083 ETH, 487 million XRP, 79,581 BCH, 1.4 million LTC, 27.6 million EOS, 74,167 DASH, 6,000 million DOGE and 213,724 USDT, which are valued at 4,000 million dollars. Earlier this month, Chen Bo and 13 of his co-conspirators were sentenced to between two and eleven years in prison.