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

  crypto.news 03 May 2024 10:27, UTC

Do Kwon remains in a tug-of-war between the U.S. and South Korea. Meanwhile, prosecutors are continuing to clamp down on crypto mixers.

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

Where else to start than with Changpeng Zhao, who has been sentenced to four months in prison after enabling money laundering at Binance.

He will now become the richest man ever sent to prison — but critics claim there’s been an “egregious miscarriage of justice” given prosecutors had been seeking three years.

One of @Binance’s compliance employees wrote the company needs «a banner ‘is washing drug money too hard these days – come to Binance, we got cake for you.'»

On @Bloomberg TV @DennisKelleher called out the @TheJusticeDept for failing to hold the company and the individuals… pic.twitter.com/AhNIRm0D9M

— Better Markets (@BetterMarkets) May 2, 2024

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

We found out this month that SBF has agreed to help investors in FTX — the self-same company he led to bankruptcy — pursue cases against celebs who endorsed the exchange.

It’s a bizarre turn of events, especially considering the one-time CEO would have had a role hiring them in the first place.

And it might rub salt in the wound for the likes of NFL legend Tom Brady, who reportedly lost $30 million when the trading platform spectacularly collapsed.

see you on the inside 🤝 pic.twitter.com/eTcjjQb0D7

— Tiffany Fong (@TiffanyFong_) April 30, 2024

Also on the roll call of fallen crypto heavyweights, there’s been a lot going on with Do Kwon recently.

The Terraform Labs co-founder went on the run after the implosion of two cryptocurrencies wiped $40 billion from the market — and was arrested in Montenegro last year after trying to fly to Dubai using a fake passport.

Kwon’s been embroiled in a tug-of-war between the U.S. and his native South Korea, which have both filed competing extradition requests so he can face criminal charges.

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

In the meantime, a civil case against Kwon and Terraform Labs has continued at speed in New York — with a jury finding them guilty of fraud charges. The Securities and Exchange Commission is now seeking a whopping $5.3 billion penalty.

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

A social media influencer called Jabara Igbara — otherwise known as “Jay Mazini” was sentenced to seven years behind bars for stealing over $8 million from Muslims via a crypto fraud scheme.

Prosecutors depicted him as a “conman” who deceived unsuspecting victims by pretending he was successful on Instagram — and gambled away his ill-gotten gains.

Jay Mazini | Source: Instagram

The U.S. Department of Justice also continued its unrelenting campaign against crypto mixers — with charges brought against Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill.

All of this relates to fears that such tools are being used by malicious actors to launder funds and evade sanctions — and if convicted, Rodriguez could face 20 years behind bars.

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

Samourai Wallet website seized | Source: U.S. DOJ

Oh so many hacks

There were a fair few exploits worth mentioning as well.

One trader lost over $180,000 worth of crypto after falling victim to a phishing attack on Ethereum, with their wallet drained in just 50 minutes.

#PeckShieldAlert #Phishing An address 0x36B4…7703 has fallen victim to a phishing attack, resulting in a loss of ~1.6B $ANDY(worth ~$162.4K) & ~18K $USDC#Fake_Phishing187019 #Fake_Phishing188615 pic.twitter.com/2FQPNKmz8z

— PeckShieldAlert (@PeckShieldAlert) April 23, 2024

Meanwhile, El Salvador’s state-controlled Bitcoin wallet — “Chivo” — has suffered a second data breach, with malicious actors leaking source code and VPN credentials for ATMs.

Earlier this month, personal information belonging to five million Salvadorans — a 144GB treasure trove of data — was also exposed online.

CiberInteligenciaSV Telegram post | Source: Telegram

A 71-year-old digital artist in India fell victim to scammers who pretended to be interested in his NFTs.

Bad news too for an investor who lost an eye-watering $800,000 because of two malicious Google Chrome extensions — amid fears they actually contained keyloggers. The victim, known as “Sell By Over” on X, wrote:

“This is a $800k costly mistake — lesson is if anything seems off such that it prompts you to input a seed, then wipe the whole PC first.”

Sell By Over on X

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

Spider-Man star Tom Holland, who has seven million followers on X, saw his account taken over by attackers who falsely promoted “SPIDER” tokens and Spiderverse NFTs.

Tom Holland’s Twitter/X account has been hacked. pic.twitter.com/ZPRYI6GXgK

— Cosmic Marvel (@cosmic_marvel) April 16, 2024

While the fake posts claimed the digital assets were being launched in conjunction with Binance, they linked off to a scam website.

In a particularly weird (and unusual) development, it also appears that the hacker may have uploaded a selfie to the celebrity’s account.

Read more: CertiK: Damage from hacks, scams reaches lowest level since 2021

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