Blockchain
CZ’s Conviction and SBF’s Settlement: April’s Crypto Crime Roundup
Do Kwon remains in the tug-of-war between the United States and South Korea. Meanwhile, prosecutors continue to crack down on crypto mixers.
April was a pretty significant month when it came to crypto crime.
Where else to start but with Changpeng Zhao, who was condemned to four months in prison for enabling money laundering on Binance.
Now he will become the richest man ever sent to prison, but critics complaint there was a “serious miscarriage of justice” as prosecutors had been trying for three years.
It stands in stark contrast to the 25-year prison sentence given to a convicted businessman Sam Bankman Fried.
We found out this month that SBF has agreed to help investors in FTX – the same company he drove into bankruptcy – to pursue cases against celebrities who supported the exchange.
It’s a bizarre turn of events, especially considering that the former CEO allegedly had a role in hiring them in the first place.
And it could rub salt in the wound for the likes of NFL legend Tom Brady, who reportedly lost $30 million when the trading platform collapsed spectacularly.
Even when it comes to the appeal of fallen cryptocurrency heavyweights, there has been a lot going on Do Kwon recently.
The co-founder of Terraform Labs went on the run after the implosion of two cryptocurrencies wiped out $40 billion from the market and was arrested in Montenegro last year after trying to fly to Dubai using a fake passport.
Kwon has been caught in a tug of war between the United States and his native South Korea, both of which have said they compete extradition requests so you can face criminal charges.
But there was all kinds of legal ping-pong that ultimately prevented a flight from taking off.
Meanwhile, a civil lawsuit against Kwon and Terraform Labs quickly progressed to a jury in New York find them guilty of fraud charges. The Securities and Exchange Commission is now looking for a huge fine of $5.3 billion.
We also covered a number of other arrests and convictions.
A social media influencer called Jabara Igbara, otherwise known as “Jay Mazini,” was. condemned to seven years behind bars for stealing more than $8 million from Muslims in a crypto fraud scheme.
Prosecutors described him as a “conman” who deceived unsuspecting victims by pretending to be successful on Instagram and gambling on his ill-gotten gains.
Jay Mazini | Source: Instagram
The US Department of Justice also continued its relentless campaign against crypto mixers — with expenses filed against Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill.
This is all tied to fears that such tools will be used by bad actors to launder funds and evade sanctions – and if convicted, Rodriguez could face 20 years behind bars.
The Samourai Wallet website has now been seized — and here’s what it currently looks like:
Samourai Wallet website seized | Source: US Department of Justice
Oh, so many tricks
There were also some notable exploits.
A trader lost over $180,000 in cryptocurrencies after falling victim to a phishing attack on Ethereum, with their wallet drained in just 50 minutes.
Meanwhile, El Salvador’s state-controlled Bitcoin wallet – “Chivo” – has suffered a second data breach, by malicious actors losses source code and VPN credentials for ATMs.
Earlier this month, personal information belonging to five million Salvadorans – a 144GB trove of data – was also exposed online.
CiberInteligenciaSV Telegram Post | Source: Telegram
A 71 year old digital artist in India fallen victim to scammers pretending to be interested in his NFTs.
Bad news also for an investor who lost a tempting sum of $800,000 due to two malicious Google Chrome extensions, amid fears that they actually contained keyloggers. The victim, known as “Sell By Over” on X, wrote:
“This is an expensive $800,000 mistake: the lesson is that if something seems out of place you are prompted to insert a seed, then clean the entire PC first.”
Sell by X
And numerous hacker attacks continue to occur targeting high-profile social media accounts.
Spider-Man star Tom Holland, who has seven million followers on X, saw his account took over from attackers who falsely promoted “SPIDER” tokens and Spiderverse NFTs.
Although the fake posts claimed that the digital assets would be launched alongside Binance, they linked to a scam website.
In a particularly strange (and unusual) development, it also appears that the hacker may have uploaded a selfie to the celebrity’s account.