DIGIVESTASI - The crypto industry, as part of new financial technology, often becomes the target of fraud by individuals looking to illegally acquire crypto coins. One of the latest cases involves the CEO of FTX, Sam Bankman-Fried, where the collapse of FTX in 2022 caused a loss of approximately US$8 billion or Rp125 trillion.

Apart from this case, here are 10 high-profile crypto fraud cases cited from crypto.news:

1. Do Kwon
   In March, Do Kwon, a South Korean national and one of the founders of Terraform Labs in Singapore, was arrested in Montenegro. He faces charges of securities fraud, wire fraud, commodities fraud, and conspiracy in the US. Kwon was detained at Podgorica airport while trying to board a flight to Dubai with a fake passport. The collapse of TerraUSD and Luna in May 2022 wiped out around $40 billion from the crypto market. Kwon was sentenced to four months in prison in Montenegro for using a fake passport.

2. Avi Eisenberg
   In December 2022, Avi Eisenberg was arrested in Puerto Rico on charges of price manipulation on Mango Markets. He is accused of fraudulently obtaining around $110 million by manipulating the price of futures contracts on Mango Markets. His trial has been postponed until April 2024 to prepare for this complex case.

3. Alex Mashinsky
   In July, Alex Mashinsky, former CEO of Celsius Network, was arrested and charged with wire fraud and other offenses. He is accused of inflating crypto prices to attract customers and pocketing tens of millions of dollars, which led to the collapse of Celsius Network with debts exceeding $1 billion. Mashinsky pleaded not guilty, and his trial is scheduled for September 2024.

4. Su Zhu
   On September 29, Su Zhu, co-founder of Three Arrows Capital, was arrested at Changi Airport in Singapore while trying to leave the country. Zhu failed to comply with a court order regarding the liquidation process of Three Arrows Capital’s assets. He was detained for four months to cooperate with the liquidator.

5. Thomas Smith, Kyle Nagy, and Braden Karony
   Thomas Smith, Kyle Nagy, and Braden Karony from SafeMoon are accused of fraud and money laundering. They allegedly diverted millions of dollars for personal expenses and misled investors about the token’s liquidity. Nagy is still at large, while Karony and Smith have been arrested.

6. Ross William Ulbricht
   Ross William Ulbricht, also known as Dread Pirate Roberts, is serving a life sentence for operating Silk Road, an online marketplace for illegal goods. Ulbricht was convicted of seven offenses, including narcotics distribution and conspiracy.

7. Charlie Shrem
   Charlie Shrem, former CEO of BitInstant, was sentenced to two years in prison in 2014 for transmitting Bitcoin for drug trade on Silk Road. Shrem has since been released and is now working as a crypto venture capitalist.

8. Mark Karpeles
   Mark Karpeles, former CEO of Mt. Gox, faced the collapse of the exchange in 2014 after losing nearly $500 million in Bitcoin. He was arrested in Tokyo in 2015 and found guilty of electronic record manipulation.

9. Nathaniel Chastain
   Nathaniel Chastain, a former employee of OpenSea, was arrested in June 2022 on charges of fraud and money laundering. He used insider knowledge to buy and sell NFT tokens for profit. Chastain was sentenced to three months in prison and fined $50,000.

10. Faruk Fatih Özer
   Fatih Faith Ozer, founder of Thodex, was arrested in Albania in 2022 after fleeing Turkey with $2 billion in crypto funds. He was extradited to Turkey in June 2023 and sentenced to 11,196 years in prison for money laundering and fraud.

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