Nicholas Mui, 22, from Grand Haven, Michigan, has pleaded guilty in the 17th Circuit Court in Kent County to conducting a criminal enterprise, involving the theft and sale of Mperks account access information. Mui is required to forfeit his computer tower and approximately $630,000 in frozen cryptocurrency and cash. He compromised Mperks, a loyalty program […]
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A Nigerian High Court in Abuja ordered that the detained Binance executive Tigran Gambaryan be remanded in prison following the postponement of his bail hearing.
Gambaryan, a US citizen, pleaded not guilty to money laundering charges earlier today and will remain in custody until his bail hearing on April 18. The trial will commence on May 2, and in the interim, he will be held at Kuje Correctional Center, one of the largest prisons in the nation’s capital.
Today’s court appearance follows Gambaryan’s arrest over six weeks ago, along with another Binance executive, Nadeem Anjarwalla, regarding the exchange’s alleged involvement in worsening Nigeria’s foreign exchange woes. Anjarwalla escaped custody last month but is being tried in absentia.
Binance has yet to respond to CryptoSlate’s request for comment as of press time.
Gambaryan faces multiple charges, including five counts of money laundering. His legal counsel contended that he shouldn’t bear responsibility for Binance’s actions, stressing his limited decision-making role within the exchange.
However, Judge Emeka Nwite dismissed this argument, citing Gambaryan’s prior representation of Binance in Nigeria. Notably, Binance said Gambaryan had previously facilitated a training session for Nigerian law enforcement agents on how to detect crypto frauds.
Furthermore, the judge highlighted Gambaryan and Anjarwalla’s affidavit affirming their presence in Nigeria since February, acting as representatives of the crypto exchange firm.
Consequently, the judge deemed Gambaryan’s refusal to acknowledge the charges on Binance’s behalf as unlawful.
The judge further rejected Gambaryan’s lawyer’s appeal to detain him under the prosecuting agency, the Economic and Financial Crimes Commission. The judge reportedly ruled that Gambaryan’ should be held at Kuje because there “have been Nigerians who had been convicted in the US and were detained in their prisons.”
The post Nigerian court orders Binance executive to remain in prison despite not guilty plea appeared first on CryptoSlate.
Your Hometown Deli in Paulsboro, N.J.
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A North Carolina ex-convict pleaded guilty to securities fraud in connection with conspiring to manipulate the stock of a company that once had a market capitalization of as high as $100 million despite owning just one, small money-losing deli in southern New Jersey.
Disgraced former stockbroker James Patten also admitted on Wednesday in Camden, New Jersey, federal court to conspiring with two other men to manipulate the share price of another related shell company, which had no tangible assets. That company’s market cap was even higher than the Hometown International deli company the men controlled.
Prosecutors said that Patten, 64, and the other two defendants conspired over eight years to increase the stock price of Hometown International and the shell company E-Waste to create a false impression of demand for the firms’ shares, and better position them as candidates for so-called reverse mergers with privately owned companies.
Courtroom sketch of James Patten, left, and attorney Ira Sorkin at N.J. District Court in Camden, N.J., Oct. 11, 2022
Source: Elizabeth Williams
The other defendants, Peter Coker Sr. and son Peter Coker Jr., remain charged in the case, in which they have pleaded not guilty.
The Cokers and Patten also are being sued over the alleged scheme by the Securities and Exchange Commission. That lawsuit in New Jersey federal court has been paused until the resolution of the criminal case.
The scheme relied on a pattern of coordinated stock trading between a relatively small number of accounts nominally held by family members, friends and associates, according to court documents.
As a result, Hometown and E-Waste’s stock prices were artificially inflated by 939% and 19,900%, respectively.
The scheme began in 2014, when Patten suggested the creation of Hometown as an umbrella corporation to a friend, a high school principal and wrestling coach named Paul Morina, to own Your Hometown Deli, which Morina and another person were discussing opening in Paulsboro at the time. Morina and the other deli owner were unaware of Patten’s scheme to manipulate Hometown’s stock, authorities have said.
Hometown Deli, Paulsboro, N.J.
Mike Calia | CNBC
Patten’s guilty plea to securities fraud, and conspiracy to commit securities fraud, could well ratchet up pressure on both Cokers to reach plea deals in the case.
Coker Sr., who lives in North Carolina, remains free on bond, while Coker Jr., a former Hong Kong resident who was arrested as a fugitive in Thailand in January, is being held without bond in a New Jersey jail.
Charges were filed against the trio in September 2022, more than a year after CNBC detailed a series of questionable connections between Hometown and E-Waste, past criminal and civil court issues of Patten and the elder Coker, and eyebrow-raising consulting deals with the companies that benefitted those two men. Your Hometown Deli closed earlier in 2022.
CNBC’s reporting was sparked by a client letter that hedge fund mamager David Einhorn sent clients in April 2021, which highlighted Hometown International’s bizarre stock price given its very meager single asset of the deli.
“The pastrami must be amazing,” Einhorn wrote in that letter.
On the heels of those articles, both Hometown International and E-Waste took the highly unusual step of disavowing their market capitalization, saying there was no basis to support their stock prices. The companies later executed reverse mergers with other firms.
Peter Coker Sr. and his wife Susan Coker at U.S. District Court in Newark, New Jersey, March 15, 2023.
Dan Mangan | CNBC
Patten, who lives in Winston-Salem, faces a maximum possible sentence of 20 years in prison and fines of $5.25 million, but he is likely to get much less than that given federal sentencing guidelines.
He is scheduled to be sentenced on April 23, at which point the other 10 securities fraud charges he faced with the Cokers will be dismissed.
His lawyer Ira Sorkin told CNBC, “He admitted that he had engaged in wrongdoing.”
When asked if Patten had agreed to cooperate with prosecutors in their case against the Cokers, Sorkin said, “I’m not going to get into anything.”
Sorkin, who previously represented the notorious late Ponzi scheme mastermind Bernie Madoff, said that Patten’s case was unusual only because of the media attention paid to it.
“The press has come in and said the pastrami sandwich cost $100 million,” Sorkin quipped.
The attorney said that at sentencing “you will find out” what the pastrami actually cost.
Lawyers for the Cokers have argued that no one actually lost money in the alleged scheme.
But prosecutors have pointed to the hundreds of thousands of dollars Hometown and E-Waste paid out in consulting fees, and to the funding of the companies by other individuals who are not charged.
Patten previously pleaded guilty in 2010 in New Jersey federal court to a mail fraud charge related to sending a client a false financial statement to cover up bad investments he had made using her money. He was sentenced to 27 months in prison in that earlier case.
Four years earlier, Patten was barred by FINRA, the broker-dealer regulator, from acting as a stockbroker for having failed to comply with an arbitration award of more than $753,000, for violating securities laws, unauthorized trading for churning a client’s account. Sorkin had represented him in that regulatory action.
Coker Sr. previously was sued for allegedly hiding money from creditors and alleged business-related fraud. He has denied wrongdoing in those cases.
Former FTX CEO Sam “SBF” Bankman-Fried’s public trial in a New York court ended with the jury finding him guilty on all seven charges on Nov. 3, including two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy and one count of money laundering conspiracy. He will return to court for sentencing by Judge Lewis Kaplan on March 28, 2024. Government prosecutors will recommend a sentence, but Kaplan will have the final say.
Bankman-Fried’s crimes each carry a maximum sentence of five to 20 years in prison, with the wire fraud, wire fraud conspiracy and money laundering conspiracy charges carrying a maximum 20-year sentence. In a press conference outside the court, United States Attorney Damian Williams called Bankman-Fried’s crimes “a multibillion-dollar scheme designed to make him the king of crypto” and one of the biggest financial frauds in American history.
Meanwhile, the current claims pricing of FTX has reached a maximum of 57%, partly due to the valuation of artificial intelligence (AI) companies that the now-bankrupt crypto exchange previously invested in. FTX claims value has jumped to the highest spot when compared with other bankrupt crypto firms, such as Celsius with 35–40%, Genesis with about 50%, Alameda Research with 10% and Three Arrows Capital with only 7–9%.
FTX has also requested the bankruptcy court in Delaware allow it to sell certain key trust fund assets, including from crypto asset manager Grayscale Investments and custody service provider Bitwise, valued at around $744 million. The latest request by FTX debtors for the sale of trust assets comes after the court had earlier approved the liquidation of nearly $3.4 billion in crypto assets.
U.S. President Joe Biden issued an executive order establishing new standards for AI safety and security. Biden’s order stated it is building off previous actions taken, including AI safety commitments from 15 leading companies in the industry. The new standards have six primary points, along with plans for the ethical use of AI in the government, privacy practices for citizens and steps for protecting consumer privacy.
The first standard requires developers of the most powerful AI system to share safety test results and “critical information” with the government. Secondly, the National Institute of Standards and Technology will develop standardized tools and tests for ensuring AI’s safety, security and trustworthiness. The administration also aims to protect against the risk of AI usage to engineer “dangerous biological materials” through new biological synthesis screening standards.
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Rules for crypto asset promotion that came into force in the United Kingdom on Oct. 8 have led to some confusion, judging from the low level of compliance. The Financial Conduct Authority (FCA) responded with additional guidance for crypto firms to help them fall into line. The new 32-page guidance does not create new obligations for crypto firms, but the authors noted that it reflected a new “secondary international competitiveness objective” in addition to addressing its expectations for firms’ domestic behavior. The guidance section of the text emphasized key segments of the rules and other pertinent legal documents. The second section gives detailed answers to questions submitted during the consultation phase.
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The Swiss National Bank (SNB), six commercial banks and the SIX Swiss Exchange will work together to pilot the issuance of wholesale central bank digital currencies (CBDCs) in the nation, officially known as the Swiss franc wCBDC. The pilot project dedicated to wholesale CBDC, named Helvetia Phase III, will test the efficacy of a Swiss franc wCBDC in settling digital securities transactions. The pilot builds on the findings of the first two phases — Helvetia Phases I and II — conducted by the BIS Innovation Hub, the SNB and SIX. The Swiss wCBDC pilot project will be hosted on SDX and use the infrastructure of Swiss Interbank Clearing. According to the announcement, the pilot will run from December 2023 to June 2024.
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Former FTX CEO Sam Bankman-Fried was found guilty of all seven charges by a jury in his criminal trial in New York after about four hours of deliberations.
Bankman-Fried was found guilty of two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy and one count of money laundering conspiracy.
He will return to court for sentencing by New York District Judge Lewis Kaplan on March 28, 2024. Government prosecutors will recommend a sentence, but Judge Kaplan will have the final say.
Bankman-Fried’s crimes each carry a maximum sentence of between five and 20 years in prison with the wire fraud, wire fraud conspiracy and money laundering conspiracy carrying a maximum 20-year sentence.
In a press conference outside the court, New York Southern District U.S. Attorney Damian Williams called Bankman-Fried’s crimes “a multibillion-dollar scheme designed to make him the king of crypto” and one of the biggest financial frauds in American history.
Bankman-Fried’s attorney, Mark Cohen, said in a statement: “We respect the jury’s decision. But we are very disappointed with the result. Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him.”
STATEMENT FROM THE TEAM OF SAM BANKMAN-FRIED —
“We respect the jury’s decision. But we are very disappointed with the result. Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him.” pic.twitter.com/Q69w6nKB34
— Teddy Schleifer (@teddyschleifer) November 3, 2023
Other key FTX executives, including former Alameda CEO Caroline Ellison, FTX co-founder Gary Wang and former FTX engineering head Nishad Singh, have all pleaded guilty to various charges and worked with the government to testify against Bankman-Fried in the five-week trial.
Related: ‘Fuck regulators,’ said SBF behind closed doors: Report
Bankman-Fried had pleaded not guilty to all charges, and during his trial, he took the stand to maintain his innocence and mark up FTX’s November 2022 collapse as “a number of big mistakes.”
He denied any wrongdoing in FTX’s relationship with Alameda and attempted to distance himself from key decisions.
Bankman-Fried pinned the blame on Wang for creating a function that allowed Alameda to trade funds on FTX that it didn’t have and claimed he “wasn’t entirely sure what happened” with Alameda’s line of credit, which ballooned to billions in the collapsing crypto market of 2022.
In his testimony, he also blamed Ellison for not focusing on risk management and didn’t believe he defrauded FTX customers by taking over $8 billion worth of their funds; instead, he framed it as Alameda borrowing from the exchange.
Magazine: Blockchain detectives — Mt. Gox collapse saw birth of Chainalysis
Additional reporting by Ana Paula Pereira.
Salame’s decision to cooperate with authorities and admit to his involvement in the alleged misconduct at FTX comes as a reversal of his earlier stance.
Ryan Salame, a former top executive of the FTX Derivatives Exchange, the now-bankrupt crypto trading platform, has reportedly pleaded guilty to criminal charges in a New York courtroom. The timing of Salame’s guilty plea is especially significant, as it comes less than a month before the scheduled trial of Sam Bankman-Fried (SBF), the former CEO of FTX.
Bankman-Fried has been accused of masterminding one of the largest financial frauds in US history, with prosecutors alleging a web of deceit and manipulation that ultimately led to massive financial losses for investors.
Ryan Salame has pleaded guilty to one count of conspiracy to operate an unlicensed money-transmitting business and one count of conspiracy to make unlawful political contributions and defraud the Federal Election Commission. These charges paint a picture of a complex web of illicit activities that extends beyond the crypto space.
Facing a maximum sentence of 10 years in prison, Salame’s admission of guilt is a significant development in the investigation into FTX’s operations. It raises questions about the extent of his involvement in the alleged wrongdoing and what information he might provide to authorities as part of his cooperation.
The plea deal agreed upon by Salame includes several key provisions. Firstly, Salame has agreed to forfeit a staggering $1.5 billion. Additionally, he will make restitution of $5.6 million to FTX debtors, providing some relief to those who may have suffered financial losses due to the exchange’s actions.
Salame has also agreed to pay $6 million to the US government by his sentencing date, further demonstrating his commitment to making amends for his role in the scandal. As part of the forfeiture, Salame will surrender property in the Berkshires and a 2021 Porsche 911.
Salame’s sentence is scheduled for March 6, 2024, and is likely to be a watershed point in the FTX probe. The information and cooperation he provides to prosecutors could have far-reaching consequences for the case against Sam Bankman-Fried and possibly other people involved in the exchange.
Salame’s decision to cooperate with authorities and admit to his involvement in the alleged misconduct at FTX comes as a reversal of his earlier stance. The former FTX executive had previously indicated that he would invoke his Fifth Amendment rights against self-incrimination if called as a witness against Sam Bankman-Fried at the upcoming trial.
Meanwhile, Salame is not the first insider to cooperate with authorities in the wake of FTX’s collapse and subsequent bankruptcy. Caroline Ellison, the former head of Alameda Research, Bankman-Fried’s hedge fund, Gary Wang, co-founder of FTX, and Nishad Singh, a former engineer at FTX, have all previously pleaded guilty and are assisting prosecutors.
Their cooperation adds weight to the allegations of financial misconduct and wrongdoing surrounding the exchange.
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
Roman Storm, a key developer behind cryptocurrency mixer Tornado Cash, pleaded not guilty to several criminal charges, Inner City Press said on Sept. 6.
That report indicates that Storm pleaded not guilty to charges contained within an earlier indictment. Those charges, which were first announced on Aug. 23, include conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money-transmitting business.
Following Storm’s plea, prosecutors asserted that Storm, with Tornado Cash, aided the North Korean state hacking organization Lazarus Group. As a coin mixer, Tornado Cash had legitimate privacy applications but could have been used to launder money as well.
During the proceedings, Prosecutors stated that they plan to obtain discovery materials from GitHub and said that they have “multiple terabytes” of Russian-language data from Dutch authorities. Prosecutors also discussed the handling of classified materials with the judge. Prosecutors acknowledged that another accused individual — known to be Roman Semenov based on past reports — remains a fugitive outside of the U.S.
Finally, prosecutors agreed to release Storm on a $2 million bond secured by his Washington residence by Sept. 15. Prosecutors said that they have seized Storm’s Russian passport and that his movement is restricted to parts of the United States.
Proceedings suggest that a trial will occur on Nov. 30.
Inner City Press noted connections to other high-profile cryptocurrency cases. It observed that Assistant U.S. Attorney Thane Rehn, who is a prosecutor in the case at hand, is also a prosecutor in the case against former FTX CEO Sam Bankman-Fried.
Inner City Press further noted that Storm’s lawyer is Brian Klein. Klein previously represented Virgil Griffith, an Ethereum developer who was charged and found guilty of sanctions violations involving North Korea.
All of the above cases are or were handled by the U.S. Attorney’s Office for the Southern District of New York — a division of the Department of Justice (DOJ) that is currently highly involved in prosecuting crypto-related crimes.
The post Tornado Cash developer pleads not guilty to charges of conspiracy, money laundering appeared first on CryptoSlate.