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The U.S. Department of Justice (DOJ) published four recent press releases related to cryptocurrency enforcement actions. According to one of the press releases, the developer of "Mutant Ape Planet" NFTs, who is a French national residing in the United Arab Emirates, has been charged with a $2.9 million fraud scheme. The press release alleges that the developer executed a "rug pull," which is similar to a "pump and dump" scheme in which the developer made false representations of the benefits of the NFTs and, once all the NFTs were bought, stopped communicating with purchasers, withdrew the purchasers' funds from the company's cryptocurrency wallets, and used the funds for his personal use.
A second DOJ press release announced conspiracy, wire fraud, and money laundering charges against additional cryptocurrency Ponzi scheme promoters related to U.S. v. Francisley da Silva et al., 22 Cr. 622 (AT) (SDNY). The first promoter is alleged to have tried to conceal the fraud by laundering defrauded funds through shell companies and making large personal purchases. The second promoter is alleged to have presented himself as the company's CEO but was in reality a paid actor. The second promoter is a Spanish national and the U.S. government is seeking his extradition.
A third DOJ press release announced that Nikhil Wahi has been sentenced in the first criminal action brought alleging a cryptocurrency insider trading scheme. Wahi was sentenced to 10 months in prison and ordered to pay $892,500 in forfeiture after he pleaded guilty to one count of conspiracy to commit wire fraud. Wahi allegedly obtained from his brother, who was an employee of Coinbase, confidential information regarding which assets would be listed in advance of the listings, used the information to purchase cryptocurrency that was soon to be listed on the exchange, and at times sold the crypto after listing for a profit.
A fourth DOJ press release announced that Gary Harmon pleaded guilty to wire fraud and obstruction of justice for unlawfully taking over 712 bitcoin that had been seized by law enforcement pending criminal forfeiture. The press release states that Harmon knew the government was trying to recover bitcoin stored on his brother's device for forfeiture and that he used his brother's credentials to recreate the bitcoin wallets that were stored on the device and transferred approximately $4.8 million worth of bitcoin to his wallets and through online mixers.
For more information, please refer to the following links:
- Non-Fungible Token (NFT) Developer Charged in Multi-Million Dollar International Fraud Scheme
- U.S. Attorney Announces Fraud And Money Laundering Charges Against Additional Cryptocurrency Ponzi Scheme Promoters
- Defendant Sentenced In Groundbreaking Cryptocurrency Insider Trading Case
- Ohio Man Pleads Guilty for Unlawfully Stealing Over 712 Seized Bitcoin Subject to Forfeiture in Brother's Pending Criminal Case
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