Two individuals, a woman and a man, were captured in Argentina on charges of having perpetuated a Ponzi scheme that moved over $400 million in cryptocurrency in Brazil. The operation managed to track the couple’s whereabouts with the help of the Argentine Federal Police and Interpol. Argentina Captures Couple Accused of Orchestrating a $400 Million […]
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Zhu Su, co-founder of the now-bankrupt Three Arrows Capital (3AC), has been apprehended in Singapore, according to a tweet by online news aggregator db, known as @tier10k on X, and later confirmed by Three Arrows’ liquidator, Teneo.
According to the liquidator, Zhu’s arrest and sentence stems from his failure to cooperate during 3AC bankruptcy proceedings. His partner and 3AC co-founder. Kyle Davies, is also wanted by Singaporean authorities but has not yet been apprehended.
3AC’s downfall was a shocking event in the crypto industry, given its prominent position and substantial investment stakes in projects such as LUNA, Aave, Avalanche, BlockFi, Deribit, and Solana. The company’s lack of a robust risk management framework, coupled with reckless dealings and a significant degree of greed, set the stage for its collapse, according to an analysis by CryptoSlate.
The chain reaction leading to 3AC’s collapse was set off when LUNA, a major investment of the firm, experienced a crash in May. Despite managing approximately $18 billion in crypto assets at its peak, 3AC failed to meet its margin calls in June, leading to speculation about the firm’s financial status. Subsequently, the failure to repay borrowed money from crypto broker Voyager Digital, totaling $665 million, led to further destabilisation in the industry.
The Monetary Authority of Singapore (MAS) played an instrumental role in bringing light to the firm’s murky dealings. In September, MAS issued a nine-year prohibition order against 3AC founders Zhu Su and Kyle Davies. MAS’s investigation revealed that 3AC had failed to inform the regulator about the appointment of Cheong Jun Yoong Arthur as its portfolio manager and had misrepresented his employment status. These actions, in addition to an inadequate risk management framework, were attributed to the failures of Zhu and Davies in fulfilling their duties.
3AC’s collapse had far-reaching effects, impacting not just its stakeholders but also other companies in the industry. Voyager Digital was forced to file for bankruptcy due to the lack of repayment from 3AC. The cascade of events led to damages totaling more than $3 billion, affecting 27 companies in total.
The post Su Zhu arrested in Singapore; Kyle Davies wanted by authorities appeared first on CryptoSlate.
Hong Kong police officers have arrested crypto influencer Joseph Lam Chok for promoting the JPEX crypto platform, South China Morning Post reported on Sept. 18.
Per the report, the police questioned the social media celebrity, and his company at the Entertainment building in Central was raided.
JPEX is a crypto platform believed by many to have been rug-pulled. The Hong Kong police claimed it received more than 80 complaints about the exchange, with customers saying they lost about $34 million.
The police had earlier said that the China Securities Regulatory Commission (CSRC) referred the case to it, leading the agency to set up a hotline for the public to report incidents.
The CSRC said that JPEX promoted its services using several entities, none registered with the regulatory authorities in China or Hong Kong.
The arrest comes after JPEX announced that it will pause its Earn Trading transactions on Sept. 18. The Japanese exchange said that the halt will mean users cannot place new earn orders, but the existing ones will continue to generate rewards until their end date.
JPEX has been suspending some of its services as it faces concerns about whether it has licenses for regulated operations. The Hong Kong Securities and Futures Commission recently questioned its yield offering on USDT. In response, the exchange raised USDT withdrawal fees to keep most funds.
Meanwhile, Hong Kong authorities have been cracking down on crypto scams and unregistered exchanges, especially after its new crypto regulatory regime became effective in June 2023.
The post Hong Kong social media star arrested for promoting controversial JPEX crypto platform appeared first on CryptoSlate.
The U.S. Department of Justice (DOJ) announced charges against two individuals who co-founded Tornado Cash on Aug. 23.
The agency unsealed an indictment charging Roman Storm and Roman Semenov with various wrongdoings related to creating, operating, and promoting Tornado Cash — a once-popular Ethereum-based coin mixer that obscured crypto transactions.
U.S. Attorney Damian Williams said:
“While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes.”
The DOJ further noted that Tornado Cash handled $1 billion in criminal proceeds and laundered funds on behalf of North Korean cybercrime groups.
The agency’s complete list of charges against the two Tornado Cash co-founders includes conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money-transmitting business.
The DOJ said that Storm has been arrested in Washington State and will be presented in court, while Semenov has not yet been located or arrested.
The U.S. Treasury separately announced sanctions against Semenov, an action that will prohibit other parties from transacting with him. The agency noted that those who transact with Semenov may be designated themselves.
A third developer, Alexey Pertsev, was arrested in the Netherlands in August 2022. The DOJ did not announce charges against Pertsev today. Treasury mentioned Pertsev’s past arrest but did not announce sanctions against him (or against Storm).
The Treasury initially imposed sanctions on Tornado Cash in August 2022, effectively banning mainstream access to the coin mixer.
However, Tornado Cash continued to operate due to its decentralized nature and reliance on cryptocurrency. The platform has even survived other trials: Tornado Cash’s governance system was notably hacked in May 2023, leading to a theft of less than $1 million. Governance coin holders later regained control through a new proposal.
Data from DefiLlama suggests that Tornado Cash remains active with $245 million in total value locked (TVL), down from its all-time high TVL of $1.1 billion.
The post Tornado Cash co-founders charged by DOJ; one sanctioned by U.S. Treasury while the other arrested by FBI appeared first on CryptoSlate.
Sam Bankman-Fried, the founder and former CEO of FTX, has had his bail revoked and will now be held in prison, Reuters said on Aug. 11.
That report indicates that U.S. District Judge Lewis Kaplan revoked Bankman-Fried’s bail following earlier concerns about witness tampering.
Judge Kaplan noted during the latest hearing that Bankman-Fried had provided documents regarding former associate Caroline Ellison to New York Times reporters during an in-person meeting at his parents’ home. The judge reasoned that Bankman-Fried knew that “he was least likely to be caught” by conducting the meeting in this way and asserted that the accused was “was covering his tracks.”
Separate reports from The New York Times quote Kaplan as stating that Bankman-Fried had “gone up to the line over and over again,” thus necessitating the bail revocation. Bankman-Fried attempted to contact other relevant parties over the course of this year.
Federal prosecutors argued for Bankman-Fried’s bail to be revoked around July 26. They insisted that Bankman-Fried’s actions could sway witnesses if he were to remain on bail and asserted that an existing gag order provided insufficient restrictions.
Reuters reported that Bankman-Fried was arrested at the end of the latest hearing. Both of Bankman-Fried’s parents were present in the courtroom audience.
The location at which Bankman-Fried will be held has not been confirmed. However, according to Reuters, prosecutor Danielle Sassoon said that Bankman-Fried should be held at the medium-security Putnam County Correctional Facility. This will provide him with an online laptop so that he can review evidence prior to his trial.
Despite Sassoon’s apparent leniency in choosing a holding location, the New York Times portrays Sassoon as taking a harsh position on Bankman-Fried’s actions. There, she is quoted as stating that “no set of release conditions” can ensure the community’s safety and asserting that the accused is “intent on exploiting the conditions of release.”
Though the entirety of the latest hearing has not been made public, a minute entry in Bankman-Fried’s case docket confirms that Bankman-Fried’s bond has been revoked and that the “defendant [was] ordered remanded” during the hearing.
That entry also states that Bankman-Fried’s legal team moved to delay the court’s ruling on a pending appeal, but that this request was denied by the court. Reports suggest that his legal team otherwise intends to contest the result.
Bankman-Fried’s imprisonment begins less than two months before his October trial. Until now, apart from a brief incarceration in The Bahamas, Bankman-Fried has mainly been on bail and under house arrest at his parents’ home in Palo Alto, California.
The post Sam Bankman-Fried arrested as bail is revoked appeared first on CryptoSlate.