CZ sentenced and SBF’s deal: April’s crypto crime round-up

As a researcher who has followed the crypto space closely for several years, I find April 2024 to be an especially significant month when it comes to crypto crime. The recent developments in the crypto world are truly astounding and often disheartening.

Kwon Do’s situation remains tense as he faces ongoing tensions between the legal authorities of the United States and South Korea. Concurrently, cryptocurrency mixers have become a focus for intensified investigations from prosecutors.

April’s been a pretty significant month when it comes to crypto crime.

As a crypto investor, I would express it this way: I’d begin by addressing Changpeng Zhao, the founder of Binance, who was recently given a four-month prison sentence due to his role in facilitating money laundering on the platform.

Critics argue that a significant injustice has occurred, as the man about to be imprisoned was initially facing only three years in court despite eventually amassing immense wealth.

One of Binance’s compliance officers wrote that the company is finding it overly difficult to launder money through their system these days, suggesting a sign reading “Washing dirty money? Binance has a better offer – come join us!” instead. On Bloomberg TV, Dennis Kelleher criticized the Department of Justice for not taking stronger action against both the company and the individuals involved.

— Better Markets (@BetterMarkets) May 2, 2024

It’s a stark contrast to the 25-year jail term handed to doomed entrepreneur Sam Bankman-Fried.

This month, it was revealed that SBF, the former head of FTX, has chosen to assist investors in their lawsuits against celebrities who promoted the now-bankrupt exchange.

As a researcher, I find it quite intriguing how the unexpected unfolds – even more so when we consider that the former CEO, who once held the power to hire, is now being replaced by those he or she brought on board.

Tom Brady, a renowned NFL legend, could feel even more displeased as he allegedly lost approximately $30 million due to the sudden collapse of the trading platform.

In recent news, Do Kwon has joined the list of prominent figures in the crypto world who have faced challenges.

Last year, the founding partner of Terraform Labs fled after the collapse of two cryptocurrencies caused a $40 billion loss in the market. He was subsequently apprehended in Montenegro while attempting to travel to Dubai with a falsified passport.

Kwon finds himself caught in the middle of a dispute between the United States and South Korea over extradition. Both countries have put forward requests for his surrender to face criminal accusations.

But there’s been all sorts of legal ping-pong that’s ultimately prevented a flight from taking off.

During this period, a civil lawsuit against Kwon and Terraform Labs has persisted in New York courts. A jury has returned a verdict finding them liable for fraud allegations. The Securities and Exchange Commission is now advocating for a substantial penalty of $5.3 billion.

We’ve also been covering a slew of other arrests and convictions.

Jabara Igbara, also recognized as “Jay Mazini” on social media platforms, received a seven-year prison sentence for defrauding Muslims out of more than $8 million through a cryptocurrency scam.

I’ve been accused of being a deceitful individual by prosecutors. They claimed that I fooled innocent people on Instagram by giving them the false impression of my success, only to squander any ill-gotten funds on reckless gambling.

As a criminal analyst, I’ve been closely monitoring the ongoing efforts of the U.S. Department of Justice in their crusade against crypto mixing services. Recently, they brought charges against the founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill.

As a crypto investor, I’m deeply concerned about the potential misuse of advanced financial tools. The fear is that these instruments are falling into the wrong hands and being used for illicit activities such as money laundering and evading sanctions. If found guilty, Rodriguez could face up to 20 years in prison for his actions.

Samourai Wallet’s website has now been seized — and this is what it currently looks like:

Oh so many hacks

There were a fair few exploits worth mentioning as well. 

I recently suffered a significant loss of around $180,000 worth of cryptocurrency due to a cunning phishing scam on Ethereum. In the blink of an eye, my digital wallet was emptied within a mere 50 minutes.

As a crypto investor, I’ve been closely monitoring the developments surrounding El Salvador’s state-controlled Bitcoin wallet, Chivo. Unfortunately, I’ve learned that this wallet has experienced yet another data breach. Hackers have managed to obtain the source code and VPN credentials for the ATMs linked to this wallet. This news is concerning as it raises questions about the security measures in place to protect users’ assets. It’s crucial for the responsible parties to address this issue promptly and transparently to restore confidence within the community.

As a crypto investor, I was alarmed to discover that earlier this month, my own personal information, along with that of nearly five million other Salvadorans, was unfortunately leaked online. The data, which amounted to an impressive 144GB, contained a wealth of sensitive information that could potentially be exploited by malicious actors.

In India, a 71-year-old artist specializing in digital creations was sadly deceived by fraudsters disguising themselves as potential buyers of his NFTs (Non-Fungible Tokens).

A unfortunate investor suffered a significant loss of $800,000 due to the deceitful actions of two harmful Google Chrome extensions. Suspicions indicate that these extensions may have been equipped with keyloggers. The affected individual, referred to as “Sell By Over” on platform X, expressed their disappointment in a post.

“Making this error costs $800k – a crucial reminder: if anything raises suspicion and requires entering a key, erase your computer first.”

Sell By Over on X

And there have continued to be a slew of hacks targeting high-profile accounts on social media.

As a data analyst, I’d rephrase it this way: I analyzed Tom Holland’s social media presence and noticed an unusual activity on his X account with seven million followers. Unauthorized individuals had taken control of the account and spread false information about “SPIDER” tokens and Spiderverse NFTs.

The bogus announcements suggested that the digital assets were being introduced in partnership with Binance. However, the links provided led to a fraudulent site instead.

As an analyst, I’ve come across an intriguing turn of events in my investigation. It seems that the hacker went as far as posting a selfie on the compromised celebrity’s account.

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2024-05-03 12:40