Already a well-known name in cryptocurrency, Sam Bankman-Fried made global headlines in November 2022 when his crypto exchange spectacularly imploded. 

FTX, the second largest crypto trading platform, and Alameda Research, a DeFi investment business also started by Sam Bankman-Friedman, declared bankruptcy amid reports about the way customer’s funds were being handled. 

Last month, the criminal trial of Bankman-Fried, for charges related to the exchange collapse, began in New York, bringing SBF right back into the spotlight. 

Now seems like a good time to remember the background of the one-time crypto wunderkind. 

## Sam Bankman Fried origin story 

Born in March 1992, SBF was seen as a digital asset prodigy, launching Alameda Research in 2017, aged just 25, and the FTX exchange two years later. 

He was born at Stamford University, where his parents, Joseph Bankman and Barbara Fried, were professors. His own education took place at California’s Crystal Springs Uplands School and Massachusetts Institute of Technology, which he graduated from with a degree in physics and a minor in maths in 2014. 

Before graduating, Sam Bankman Fried spent a summer interning at Jane Street Capital, where he traded ETFs. After leaving MIT, he returned to the firm, but three years later, in September 2017, SBF was on the move again, this time to the Centre for Effective Altruism (CEA) in California. 

In the same year, he and Tara MacAulay, also of CEA, launched Alameda Research, a quantitative trading firm. It made quite a stir with its arbitrage trading, which took advantage of the higher value of BTC in Japan than in the US, reportedly completing trades worth up to $25 million every day. 

On the back of his success, Sam Bankman Fried moved to Hong Kong in 2018. 

In mid-2019, the FTX exchange was opened, and it rapidly grew to become second only to [Binance](https://www.binance.com/en) as a crypto trading platform. 

## It all goes wrong 

In November 2022, Alameda Research and FTX filed for Chapter 11 bankruptcy. 

This came at a time when Sam Bankman Fried was still revered by many in DeFi, and he was, reportedly, the 60th richest person in the world, with a peak personal fortune of $26 billion. 

Based in the Bahamas, SBF was seen to use his wealth to support political campaigns in the US. 

After the [collapse of FTX](/news/article/ftx-bankrupt-who-to-blame), amid allegations of poor governance and mishandling of customer funds, Sam Bankman Fried was arrested in the Bahamas and [extradited to the US](/news/article/sbf-agrees-to-return-to-us-for-fraud-charges). 

In December 2022, eight criminal [charges were filed at the Southern District of New York Court](https://www.justice.gov/usao-sdny/pr/united-states-attorney-announces-charges-against-ftx-founder-samuel-bankman-fried), including allegations of wire fraud, securities fraud, money laundering, commodities fraud, and campaign finance law violations. 

Four further charges follow in early 2023. 

SBF was bailed to his parent’s home, but later remanded in custody due to allegations of attempts to tamper with witnesses. 

His trial finally got underway last month. 

## Views on regulation 

The collapse of FTX, one of the biggest names in crypto, raised serious questions around the need for regulating the industry, and led many jurisdictions to ramp up regulatory efforts. 

During the investigation, allegations around the management of both FTX and Alameda were made, including concerns about a lack of corporate governance, understanding of finances, and observation of the rules. 

SBF had spoken publicly about his views on crypto regulation, openly stating he has chosen to relocate FTX to the Bahamas due to what he termed a ‘friendly’ regulatory environment. 

During a conversation on Twitter (now X) in the same month FTX crashed, SBF described the appearance that his firms welcomed regulation and promoted the need for regulators in crypto as ‘just PR’ and not sincere. 

He claimed rules ‘don’t protect customers’ and make ‘everything worse’. He later attempted to clarify these statements, claiming he was referring to greenwashing, ESG (environment, social, and governance), and CSR (corporate social responsibility) being used instead of effective altruism. 

## “Complete failure of corporate controls” 

Among the most damning statements and allegations made in the wake of the collapse of Alameda Research and FTX were those from John J. Ray III. 

Ray, the man who oversaw the five-year bid to recover money for Enron creditors, took over as FTX CEO following the resignation of Sam Bankman Fried on 11 November, 2022. The firm filed for bankruptcy the same day. 

Later in the month, Ray, in a sworn declaration to the bankruptcy court, gave his assessment of Alameda and FTX. He said that 'never in my career' had he witnessed 'such a complete failure of corporate controls' or a 'complete absence of trustworthy financial information’. 

SBF had been due to testify to the House Financial Services Committee in December 2022. He was expected to claim FTX remained solvent, but he’d been ‘pressured' into declaring bankruptcy. He was also due to allege that those who had taken over running the firm were following the Enron precedent to earn high fees. 

Following his arrest, SBF did not appear before Congress. 

The Story of Sam Bankman-Fried 

## Alameda Research Explained 

During the trial of FTX founder Sam Bankman-Fried, the role of company Alameda Research in the dramatic collapse of the cryptocurrency exchange was regularly referred to. In the wake of the FTX debacle, many reports pointed to the contribution of Alameda to the platform's spectacular fall from grace. But what is Alameda Research? 

## Alameda Research trading firm 

Alameda Research was a DeFi (decentralised finance) investment firm established by SBF in October 2017. Headquartered in Hong Kong, the private equity firm, described by some as a quantitative cryptocurrency trading firm, made hundreds of investments. 

Described as a crypto hedge fund, Alameda made profits in crypto arbitrage by trading Bitcoin between Japan and the US. In 2019, it is reported, some of this income was used to get the FTX crypto exchange off the ground. 

As the digital asset industry suffered the crypto winter of 2022, Alameda was still investing heavily in DeFi projects, reportedly extending credit in excess of $800 million to firms like Voyager and [BlockFi](https://app.blockfi.com/signin?iss=https%3A%2F%2Fauth.blockfi.com%2F). 

Alameda collapsed after a balance sheet was leaked that claimed the business relied heavily on FTT, the token issued by FTX. 

The fall of Almeda sparked the [bankruptcy of BlockFi](/news/article/blockfi-bankrupt-court-documents), the crypto lender, amid claims it was owed $671 million by Alameda Research. BlockFi was also exposed to more than $350 million in funds frozen on the FTX exchange. 

While FTX and Alameda appeared to be distinct entities, it was reported in December 2022 that Alameda had handed over some $1 billion to assist the exchange after a company incident on the trading platform. 

## Trading activity 

Alameda was engaged in OTC (over-the-counter) cryptocurrency trading and also offered ‘full-service’ crypto trading on every exchange and market. 

It was reported that in 2022, head of its collapse, Alameda was managing more than $1 billion in digital assets and trading up to $10 billion every day in coins, tokens, and derivatives. 

It was believed to be holding some 40 cryptocurrencies, including major names like Solana, Bitcoin, Ethereum, Meta, DODO, and Swipe. But it was its exposure to FTT, the token of FTX, that proved critical. 

## End of an empire 

Media investigations into the relationship between the two companies, by [CoinDesk](https://www.coindesk.com/), among others, revealed that 40% of Alameda’s assets were FTT. 

These reports of Alameda’s reliance on FTT spooked investors, who fled the FTX exchange and dumped FTT. Unable to keep up with withdrawal requests, [FTX went into freefall](/news/article/ftx-bankrupt-who-to-blame). 

There had been hopes that Binance, the largest crypto exchange, would step in to provide liquidity for its nearest competitor and complete a buyout. But Binance stepped away from the idea. 

The business tweeted in November 2022 that it was abandoning the takeover plans following corporate due diligence and reports of customer funds being ‘mishandled’. 

With customers flooding out and the potential buyout off, both FTX and Alameda filed for Chapter 11 bankruptcy and SBF stepped down. Initial court reports put the liabilities of Alameda and FTX at between $10 and $50 billion. 

## Fall from grace 

Alameda Research had become established as a significant DeFi investor. In just five years, it made more than 220 investments, according to reports. 

Many of these took the form of capital injections into DeFi solution firms. For example, Fordefi, the FinTech and software company, announced in November 2022 that Alameda was among the investors to contribute to the $18 million it had raised to create an institutional DeFi wallet. 

With Alameda being so deep in the DeFi industry, its collapse caused problems for many projects. 

Maps.me and Oxygen, both recipients of tens of millions of dollars from the firm, ended up with almost all of their token supply frozen on the collapsed FTX exchange. 

FTX didn’t hold equity in either firm, but did hold a substantial amount of MAPS and Oxy tokens and was custodian for more than 95% of the total supply. 

## Day in court 

During SBF’s criminal trial, resulting from the collapse of FTX, it was repeatedly alleged that FTX customer funds were used by Alameda. 

Accounting expert Professor Peter Eaton, giving evidence on the apparent disappearance of $9 billion of customer funds, was clear in his assessment. Eaton conducted a painstaking analysis of the FTX and Alameda books and found substantial deficits. 

Alameda was supposed to be holding around $11.3 billion in FTX customer funds, but little more than $2 billion of that was being held in company bank accounts. Eaton testified that almost 70% of the loans Alameda was making were funded with FTX customer funds. 

Alameda research logo on image of research laptop

Alameda Research: Explained

Thodex was among the biggest cryptocurrency exchanges in Turkey. Unfortunately, the exchange suddenly disappeared during the start of the peak of the market in April 2021, when most cryptocurrencies began soaring to new price milestones. 

On Friday, 8 September, 2023, various [news outlets reported ](https://www.coindesk.com/policy/2023/09/08/11196-years-in-prison-for-faruk-ozer-ceo-of-collapsed-turkish-crypto-exchange-thodex/)that the Thodex exchange's founder, Faruk Fatih Özer, along with his brother Güven and sister Serap, had been given an 11,196-year, 10-month, and 15-day sentence. Also imposed were approximately $5 million in judicial fines. 

As one of the go-to exchanges during the first half of 2021 for many crypto traders in Turkey, more than 400,000 registered users of the Thodex platform suddenly found themselves unable to log into their accounts to access their deposits. 

The total amount locked on the Thodex platform was about $2 billion worth of cryptocurrencies. With many traders ushering out their concerns online and others filing criminal complaints against the exchange, Özer fled his home country of Turkey and hid in Albania. 

During the same month, [Turkish police detained](https://www.dailysabah.com/business/finance/turkey-seeks-crypto-boss-ozer-detains-dozens-in-alleged-2b-scam) more than 60 people across eight regions linked to the collapsed exchange. 

Additionally, detention warrants were issued for another 16 people connected to the Thodex trading platform. 

With this, a red notice was issued for his arrest and extradition. In August 2022, he was [arrested in Himare](https://www.reuters.com/world/fugitive-turkish-crypto-fraud-suspect-arrested-albania-resort-2022-08-30/), a southern resort area in Albania. 

In early April of this year, Özer was extradited to Turkey, with the Istanbul Airport Police Department taking custody of him. 

He arrived in Turkey with seven charges laid before him, which included laundering the total amount of money resulting from the collapse of the exchange and defrauding merchants, cooperative managers, company executives, and people by employing information systems as a tool of a credit institution or a bank. 

## Verdict on Thodex employees and partners  

Overall, the trial brought cases against 21 defendants, who faced a maximum of 40,564 years in prison. 

In addition to the jailing of Özer and his brother and sister, four senior employees of Thodex were jailed. Of the 21 defendants, 16 were acquitted. 

The collapse of cryptocurrency exchanges is not a recent development. Many of the trading platforms that made Statista's list of the biggest exchanges by 24-hour trading volume have disappeared due to cybercriminal activities. 

According to a news report by Bitcoin.com, about 42% of exchanges have failed since 2014. 

Many of them vanished without a trace. This means that thousands, if not millions, of traders who held digital assets with them have had to count their lost cryptocurrencies as bad debt. 

## How to avoid a Thodex-style loss of your crypto assets 

Agencies like the US SEC ([Securities and Exchange Commission](https://www.sec.gov/oiea/investor-alerts-and-bulletins/ia_fraudulentdigitalasset)) continue to publish Investor Alerts cautioning traders about fraudulent [crypto trading ](/news/article/is-crypto-regulated-across-the-globe)websites and digital assets. 

As a sign of caution, stay away from investments that promise guaranteed high investment returns, are offered by unlicensed sellers, use complicated language and jargon that is difficult to comprehend, pressure you to buy on the go, or make unsolicited offers. 

Irrespective of the annual percentage yields (APYs) they offer, they are likely to be scammers hiding behind the anonymous and private nature of the decentralized finance sector. 

So, stay alert and take advantage of platforms such as CERTIK, a tool that monitors and analyzes several protocols and projects related to the blockchain sector. 

More importantly, despite your quest to remain anonymous, try and patronize regulated trading platforms so that you may have a chance of recouping some, if not all, of your crypto assets should the exchange collapse. 

What's behind Thodex CEO's 11,196-year sentence? 

Fraud in online advertising is a major headache for media companies. One platform dedicated to fighting it is Verasity, the protocol and product layer blockchain committed to a better user experience for everyone in the digital content space. 

By offering security, transparency, and trust, [Verasity](https://verasity.io/) hopes to eliminate online ad fraud. 

## How does Verasity work? 

Using Proof of View (PoV) technology, Verasity delivers transparency in advertising. Leading content delivery networks integrate VeraViews as they attempt to eliminate ad fraud and bring accountability and authenticity to online advertising. 

PoV is patented technology combining a distributed ledger backend with advanced bot detection. The fact that transactions are stored on an open ledger blockchain ensures that the transactions are valid and that there is transparency in reporting and auditing. 

When digital transactions happen, hundreds of data points are passed between devices. These can be analysed to identify bot involvement. Bot transactions are responsible for the majority of online advertising fraud. 

## VRA token 

Verasity has its own digital currency, VRA, which was designed for exchanging and transferring value in areas such as eSports, online gaming, NFTs, and digital videos. It is listed on more than two dozen cryptocurrency exchanges and held in more than 300,000 VeraWallets. 

VRA can also be used in Verasity’s staking programme and utilised to pay rewards to those participating in the network. 

## An entire ecosystem 

The Verasity [ecosystem](/news/article/vra-crypto) encompasses a wide range of features and tools for online advertisers. 

The primary offering, [VeraViews](https://verasity.io/veraviews), is an ad tech stack using the patented PoV tech to detect and prevent fraud in the deployment of video content by identifying bot results that artificially inflate viewing figures. 

Verasity also has its own video player, VeraPlayer, with VeraViews built in, which promises to optimise advertising revenue for its partners. It is deployed on the eSports offering, [VeraEsports](/news/article/vra-crypto-esports). 

Verasity has its own custodial wallet for storing the VRA tokens mentioned earlier. It not only stores the tokens, but acts as a payment system supporting crypto and on-crypto options. Among the ways users can earn VRA is through the Watch and Earn mechanism. This is a reward system paying users token incentives for watching video content. 

And Verasity is part of the NFT industry with the VeraVerse marketplace, described as a complete ecosystem for NFTs, including in-game items, art, and collectables. 

## Who is behind it? 

The longstanding involvement of key team members, such as David Archer, Robert Keogh, Justin Wenczka, Elliot Hill, Sergey Molybog, and Olena Buyan, built confidence among users and investors. 

The team members are seen as professionals with established track records in relevant sectors, including media, video, and tech businesses. 

## VRA price prediction 

Price predictions for the [VRA token ](/news/article/vra-coin-doubles)suggest solid, if not stellar, increases. 

Analysis by [AMBCrypto](https://ambcrypto.com/predictions/verasity-price-prediction) looked at the possible price trends for this year as well as looking even further into the future. 

It suggested that by next month the average value will be $0.014, with a possible high of $0.015. Early next year, VRA could see that average increase to $0.015, with a high of $0.016 in February, the site said. 

The same value range is suggested for the remainder of this year, with prices ranging from $0.014 to $0.016 in November and December. 

Studying historical data, platform developments, and investor/community sentiment, AMBCrypto was able to make predictions about the VRA value longer term. It suggests slow but solid increases in the token’s value. 

For 2024, the site predicts values ranging from $0.011 to $0.017, with an average of around $0.014. A marginal increase is forecast for the following year, with an average of $0.018 and prices ranging from $0.014 to $0.022. 

This trend of marginal value increases is predicted for the rest of the decade, with averages of $0.023, $0.029, $0.037, and $0.046 in 2026, 2027, 2028, and 2029 respectively. 

## Could VRA reach a dollar? 

The AMBCrypto research suggests that VRA reaching a value of $1 is a long way off. 

Looking ahead to 2030, the average price is predicted to be around $0.059. While this could increase to $0.074 in 2031 and $0.093 in 2032, markets may have to wait until 2033 for the average price of VRA to hit $0.11, when the price range is expected to be between $0.094 and $0.14. 

The site predicts another increase in 2034, hitting an average of $0.14, still well below the $1 valuation investors will be hoping for. 

Verasity – Combatting advertising fraud 

George Floyd NFTs, aka Floydies NFTs, is an NFT collection launched on [OpenSea](/news/article/guide-to-minting-nfts-opensea) in December 2021. 

The NFT collection is based on George Floyd, a black man killed by Derek Chauvin, an American police officer, in May 2020 in Minneapolis. 

The police officer murdered [George Floyd](https://en.wikipedia.org/wiki/George_Floyd) by kneeling on his throat for over nine minutes. He was sentenced to 22.5 years in prison for his crime. The incident led to large-scale racial justice protests in the country, eventually birthing the Black Lives Matter (BLM) movement. 

BLM spread like wildfire across the country and beyond its shores - the movement is a testament to our unified stance against racism. The campaign is alive even today - Premier League teams, for example, 'take a knee' before the kick-off of matches in support of the Black Lives Matter movement. 

Unfortunately, on 7 December 2021, a group of quick-money-seeking anonymous creators launched the first collection of Floydies NFTs on OpenSea, one week after the police officer who murdered George Floyd pleaded not guilty. 

[The NFT collection](/news/category/nft-news), according to its anon creators, was meant to serve as a forward-thinking and distinctive way to honour George Floyd's life. It served no such purpose - the NFTs sparked outrage along the lines of being racist and tasteless. OpenSea was forced to remove the collection shortly after. 

![floydies-nfts](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/Flydies_know_your_meme_d9667ed82e.png)

## George Floyd NFT collection history 

The NFT collection's OpenSea bio described them as a "unique and progressive way" to celebrate George Floyd. It added, "Owning a Floydie is a great way to express yourself and your beliefs!" 

The first George Floyd NFT collection comprised 11 NFTs and was launched on 7 December 2021. Each NFT is a digital cartoon depiction of George Floyd with a unique background and set of clothing. This includes depictions of George Floyd as an astronaut, Joker (the Batman universe character), a BLM protestor, and much more. 

The @FloydiesNFT X page (now dysfunctional) announced the collection launch and was greeted with more than 3,000 likes, 4,100 retweets, and plenty of backlash within three weeks. The first NFT collection was not commercially successful, with the highest-selling NFT going for 0.05 ETH. 

Mind you, this was the first collection that was launched. Many Floydies NFTs arrived later and the highest-selling NFT went for a whopping 3 ETH (roughly $12,000 at the time). 

A Floydies NFT making reference to the Sneed's Feed and Seed meme was added to the original collection on 12 December (below). By 27 December, a bidder had posted a bid of 3 ETH, and the auction was closed on 28 December. 

![George Floyd NFT](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/floyd_NFT_Know_your_meme_1e26bf599a.png)

Other NFTs added to the original Floydies collection include George Floyd dressed as a minion, a police officer (how tasteless is that?), Goku from Dragon Ball Z, Big Chungus, and much more. Talking about being distasteful, an autistic version of the man was included as well. 

In all, 22 items were launched as part of the collection, and the anon creators of Floydies NFTs raked in nearly $5,000 in profit. Was the profit worth playing with the feelings of people? No. 

## George Floyd NFT Collection: Among the worst in history 

[The NFT sphere](/news/article/the-merge-nft) has seen several bad projects, including Jungle Freaks and Little Baby Apes. Floydies NFTs are, without a shadow of a doubt, the worst collection in history. 

The George Floyd NFT set seemed to have been designed to outrage people, with the depicted imagery labelled as "troublesome" by Chris Stokel-Walker of Input Magazine. 

The Minions Floydie is a great example - what were the creators thinking? I understand freedom of speech and expression, but this is certainly crossing the line. The NFTs are disgustingly racist, and I am disappointed that they were not taken down sooner by OpenSea. 

All the collection does is mock George Floyd's death and the BLM movement. And, of course, it filled the pockets of its creators with a whole $5,000. 

The collection serves as a reminder that humanity is greedy and will try to monetise any opportunity. May George Floyd rest in peace. 

George Floyd NFTs: Worst NFT collection ever? 

This article discusses the GateEx scam, which reportedly used different domains to run faux crypto exchanges. It explores how accurate the allegations are against GateEx and how you can protect your funds. 

Since its inception, the crypto market has been plagued by scammers using varying tactics to deceive investors and lure them into investing big in their projects. These include tactics like [pump and dump,](/news/article/how-to-spot-a-pump-and-dump) [rug pulling](/news/article/rug-pull-what-is-it), and artificial inflation to trick the investors. 

## What is the GateEx scam? 

GateEx is a crypto exchange that claims to offer users a secure platform to buy and sell crypto assets. Some sources report that it provides more than 400 cryptocurrency options, and you can trade them with a trading fee of 2%. 

However, it faces serious allegations of running a fraudulent scheme where investors have lost their funds. 

Multiple websites operate in the name of GateEx exchange. Some of the domains related to the exchange that you may come across are:  

Gateexpro.com. 
- Gateexin.com. 
- Gateexpro.xyz. 
- Gateex-o.com. 
- Gateex-i.com. 

Most of these websites are not accessible right now, and you may likely find other domains for the exchange. 

These websites propagate deceitful content that promises high returns for depositing crypto in the exchange. As soon as users create an account and deposit funds, they lose it all as it does not give any withdrawal option. 

## How does the GateEx scam work? 

The scammers behind the project pose as a [crypto trading exchange.](/news/article/best-crypto-exchange-uk-reddit) They entice the investors to deposit their digital assets into the firm to receive high returns through trades. However, all the assets that users deposit in the exchange go directly into the pockets of [scammers](https://www.scamwatcher.com/scam/view/580273?__cf_chl_tk=EKfOW0mfsWE4HKsAgGx9bwt8qD.NlAVMzWq1fAc9bZY-1692116864-0-gaNycGzNHXs). 

So, anyone who trusts the platform for trading crypto may lose all their assets.   

When you create an account on GateEx, and place some crypto in it to start trading, you will first see live trades with incredible profits. But when you try to withdraw assets, the platform will not allow it, and you lose your funds permanently. 

Reportedly, it is built so that depositing crypto shares your private keys with the platform. That's why they get access to your funds and can manage them easily.  

## GateEx scam: Questions on the platform's legitimacy 

Here are some of the questions that arise regarding the legitimacy: 

### Multiple inactive domains 

One of the most concerning things about the platform is that it operates with numerous domain names. All of these domains use similar deceitful tactics to lure investors. Plus, many of these domains are inactive, and new ones keep appearing to replace them. It suggests that the scammers shut down the website once they illicitly get funds from investors and continue creating new ones to lure more investors. 

### No withdrawal 

Another thing that makes the platform’s credibility dubious is that you cannot withdraw your crypto from it. Once you deposit the amount in a GateEx account, it gives scammers direct access to your funds, and they can transfer it to any other wallet without a trace. Therefore, the platform does not allow you to withdraw funds from your account. 

### Personal data breach 

Users who have been victims of this scam reported that they lost their assets and faced data breaches. The exchange requires your personal information for setting up the account. It includes details like your email, phone number, social security number, financial info, residential address, and others. Scammers can also manoeuvre the information and compromise your privacy. 

### No verifiable credentials 

Yet another thing that makes it dubious is that there is no source from where you can verify the platform’s claims. The number of cryptocurrencies, trading fees, and other features it offers are unclear. That’s why using the platform for [crypto trading](/news/article/simple-cryptocurrency-trading) could be highly risky.   

## GateEx scam: What to do to recover your funds? 

Here’s what you should do if you become a victim of the GateEx exchange scam.  

1. Firstly, you should immediately disengage yourself from any trading activity on the platform. 
2. Secondly, you need to collect as much information as possible about GateEx. 
3. Then look for the relevant authorities in your country who can assist you with financial fraud. You can report to the [ActionFraud](https://www.actionfraud.police.uk/) website if you are a UK citizen. 
4. If the authorities catch the scammers behind it, you may get a percentage of your funds back. However, there is no guarantee. 
5. Lastly, take all the precautionary measures, like checking your bank’s insurance policy and protecting all other financial accounts.

## Closing thoughts 

GateEx exchange is one ill-reputed trading platform in the crypto market that has scammed many investors. 

The platform claims to run a crypto exchange with more than 400 coin options and promises unrealistic investment gains. However, there is no resource to support these claims, and you will mostly find GateEx scam reports on the internet.  

The fraudulent actors behind the exchange use a range of domains to attract investors. After they collect the funds from investors, the website disappears, and they start selling the same services through another domain. 

What you need to know about the GateEx scam 

The Bahamas, a tropical paradise known for its stunning beaches, became the backdrop of a gripping financial saga in which Sam Bankman-Fried (SBF) and [FTX](https://ftx.com/), the cryptocurrency [exchange](/news/article/coinswitch-exchange) he founded, were involved. 

From luxury property acquisitions to a dramatic collapse, culminating in his arrest, the story of SBF Bahamas unveils a tumultuous journey in the world of cryptocurrency. 

This article explores the SBF Bahamas adventure, including the property purchases, [the collapse](/news/article/ftx-exchange-under-investigation) of the exchange, and the subsequent arrest of its founder on criminal charges. 

## Who is SBF? 

Bankman-Fried was born in 1992 and grew up in California. He studied physics and mathematics at MIT (the Massachusetts Institute of Technology). After graduating, he held a position as a trader at Jane Street Capital, a company specializing in quantitative trading. 

Bankman-Fried established [FTX](/news/article/ftx-exchange-under-investigation) in 2017, and it quickly became one of the largest exchanges in the world. FTX offered a variety of features that appealed to traders, including high liquidity, low fees, and margin trading. 

Bankman-Fried's success with FTX made him a wealthy man. He was ranked as the youngest self-made billionaire in the world by Forbes magazine in 2021. He gained prominence as a major donor to the US Democratic Party and was renowned for his dedication to effective altruism, a philanthropic movement that advocates for the rational and efficient distribution of wealth to charitable causes. 

However, SBF's success came with a price. He was accused of using his position at FTX to manipulate the cryptocurrency market. He was also accused of using customer funds to prop up [Alameda Research](/news/article/ryan-salame-exposed-ftx-truth), a cryptocurrency trading firm he founded. 

## FTX's Bahamas property purchases 

Under the leadership of Sam Bankman-Fried, FTX embarked on a lavish real estate buying spree in the Bahamas. Property records revealed that the company, together with its senior executives and even SBF's parents, acquired numerous high-value properties totaling nearly $121 million. These acquisitions primarily consisted of luxurious beachfront homes and vacation properties, including seven opulent condominiums in the upscale resort community of Albany. 

The SBF Bahamas property purchases came to light amidst a series of troubling events. FTX, previously counted among the largest cryptocurrency exchanges globally, faced mounting financial woes, leading to a rush of customer withdrawals and subsequent bankruptcy filings. 

The collapse[ left countless creditors with significant losses](/news/article/ftx-creditors-include-google-apple-netflix), and the finger of blame pointed at SBF's alleged misuse of customer funds to prop up his trading business, Alameda Research. 

## SBF Bahamas arrest 

The founder of FTX was[ arrested in the Bahamas](/news/article/former-ftx-ceo-sbf-arrested) in December 2022 following a formal notification from the US. The allegations originated from the US Securities and Exchange Commission (SEC) investigation into FTX's trading activities. 

He was detained at his apartment complex in the Albany resort, where luxurious properties were at the center of FTX's Bahamas buying spree. 

Bankman-Fried was [brought to the US](/news/article/sbf-agrees-to-return-to-us-for-fraud-charges) through extradition. Afterward, the US District Court in Manhattan indicted him on eight counts, including money laundering and securities fraud. 

The SBF Bahamas adventure began when he moved there in 2021 after relocating the headquarters of FTX from Hong Kong. The Bahamas has a reputation as a crypto-friendly jurisdiction, and FTX was one of the first major cryptocurrency exchanges to establish a presence there. 

The arrest marked one of the most stunning falls from grace in recent corporate history as SBF's empire crumbled. The arrest shocked many, as Bankman-Fried was seen as one of the most successful and influential figures in the cryptocurrency industry. 

## What led to FTX's failure? 

On 11 November, 2022, FTX initiated [Chapter 11 bankruptcy proceedings](/news/article/ftx-bankrupt-who-to-blame) triggered by a significant increase in customer withdrawals at the beginning of that month. The then-CEO, Sam Bankman-Fried, openly acknowledged that the company lacked adequate reserve assets to fulfill the overwhelming customer demand. 

## What lies ahead for Bankman-Fried? 

SBF's future entails a trial scheduled for 2 October, 2023. After a court hearing on 22 December, 2022, a federal judge ruled in favor of his release from custody upon agreeing to a record-breaking $250 million bond. 

He will reside in Palo Alto, California, with his parents, adhering to restrictions within the Northern California area and wearing an electronic monitoring bracelet. Bankman-Fried appeared in a federal court in New York in January 2023 and entered a plea of not guilty to all allegations. 

## Conclusion 

The rise and [fall of SBF](/news/article/ftx-boss-denied-bail-in-bahamas) tell a cautionary tale of unchecked ambition and financial turmoil in the world of cryptocurrency. This saga underscores the importance of robust regulations and responsible management in safeguarding investors and upholding the credibility of the crypto industry. 

Sam Bankman Fried (SBF) Standing in the bahamas

The SBF Bahamas adventure: The rise and fall of a crypto mogul 

Cryptocurrency crime has become a common theme in a world where billions of pounds are exchanged using the possibilities of the internet aided by the power of [blockchain](/news/article/blockchain-based-fireblocks-explained) technology.  

In its latest report,[ Chainalysis](https://blog.chainalysis.com/reports/crypto-crime-midyear-2023-update-ransomware-scams/) revealed that illicit activities related to the use of [cryptocurrencies](/news/article/is-crypto-dead) amounted to $2.8 billion in the first half of 2023.  

While this was down 65% from the same period in 2022 (around $8 billion), crypto still playing a crucial role in child abuse material, fraud shops, scams, malware, ransomware attacks, and darknet markets is a cause of concern for all stakeholders of this sector.  

Although many analysts and industry experts have attributed the consistent rise of cryptocurrency crimes to its private nature, there is more to that assertion.  

In this article, we take an in-depth look at the essential factors that have led many people to use virtual currencies related to the decentralized finance ([DeFi](/news/article/what-is-a-defi-token)) economy. 

## Cryptocurrency crime: Why is it still present in 2023? 

The blockchain-powered economy shed 65% of its overall market capitalization in 2022 after opening the year on 1 January with a value of approximately $2.2 trillion and closing the year on 31 December with around $756 billion, data from [TradingView ](https://www.tradingview.com/markets/cryptocurrencies/global-charts/)showed.  

Within seven months, the market had rebounded, leading to a 54% rise in 2022’s close. As of 11:00 UTC on 13 July 2023, the total market capitalization of the industry was about $1.2 trillion.  

This rebound has been positively reflected in the price performance of mainstream coins such as Bitcoin (BTC), Ethereum (ETH), meme tokens like Pepe ([PEPE](/news/article/rare-pepes-collectible-memes)), and artificial intelligence (AI) and big data tokens such as SingularityNET (AGIX), Fetch.ai (FET), and the Graph (GRT) among others.  

Having seen the renewed interest in digital assets through the injection of liquidity (reflected in daily trading volume), cybercriminals have turned to crypto again due to the special features it continues to possess, in addition to other factors. 

Cryptocurrency crime is special for organized groups because of the following factors.  

- Pseudonymity and Anonymity – If you try to hold a bank account with any financial institution, there is a 100% chance that representatives of the organization will be asked for identification in the form of Know Your Client or Customer (KYC). With this, they verify the legal details of your full name, country, residential address, and source of funds. If you are supposed to receive funds through cross-border payments, transactions normally go through intermediaries (central banks, insurance companies, and clearinghouses) before they are credited to your account. This process is complex, slow, and does little for your privacy, although it is highly secure. Cryptocurrencies powered by cryptographic encryptions forgo all these processes and allow anyone, no matter where they are, to send and receive money over the internet at relatively lower fees. This is why it has gradually replaced cash as the go-to currency for illicit activities. 

- [Cryptocurrency On-Ramp and Off-Ramp](https://knowledgehub.transparency.org/helpdesk/cryptocurrencies-corruption-and-organised-crime-implications-of-the-growing-use-of-cryptocurrencies-in-enabling-illicit-finance-and-corruption) – When Satoshi Nakamoto created Bitcoin (BTC), it was extremely difficult for asset holders to convert them back to cash. This was because the much-needed technology was not available, and those who had access to it were highly tech-savvy. As BTC and other coins gain mainstream attention, with thousands currently accepted as payment methods by traditional institutions, many financial technology (Fintech) firms have added on-ramp and off-ramp innovations to support the centralized and decentralized finance economies. On-ramp is where cash (fiat money) is converted to crypto. This is mostly done by purchasing digital coins via ATMs, bank transfers, or cards. On-ramp is mostly patronized by traders and investors. Off-ramp is where cryptocurrency is converted into fiat currency. This can be done through Peer-to-Peer (P2P) cryptocurrency marketplaces such as Binance and withdrawing funds through an exchange. In many parts of the world where most people are underbanked or unbanked or face severe sanctions, P2P has become the way for most people to sell off their crypto for cash. Many telecommunications companies have created wallets independent of mainstream financial institutions. These can be used to gradually cash crypto obtained through unscrupulous dealings. 

- Lack of comprehensive global regulatory framework: The Markets-In Crypto Asset ([MiCA](https://www.consilium.europa.eu/en/press/press-releases/2023/05/16/digital-finance-council-adopts-new-rules-on-markets-in-crypto-assets-mica/#:~:text=This%20regulatory%20framework%20aims%20to,of%20the%20crypto-asset%20sector.)) regulation is scheduled to take effect in 2024. The European Union (EU) will introduce [MiCA](/news/article/mica-crypto-market) to preserve financial stability and protect investors while allowing for the positive sides of crypto in the form of innovation to thrive. While this will significantly limit cryptocurrency crimes, the laws would be exclusive to member countries. This means that VASPs (Virtual Asset Service Providers) would need to comply with certain rules and regulations that will go a long way to protect investor funds. Despite this, crypto transactions cannot be reversed, so once residents of the region are scammed, or a VASPs system is compromised through hacking, cybercriminals are still free to move some of the money around before enforcement sets in. Aside from the EU, agencies in the US and the UK have failed to come up with a real regulatory vehicle for stakeholders. Many crypto companies in the US have instead accused the SEC of operating on enforcement rather than compliance. With nobody taking responsibility, criminals continue to hack, scam, and launder billions of dollars annually.  
 
## Cryptocurrency crime mostly involves privacy coins  

[Bitcoin](/news/article/bitcoin-to-pounds), Monero ([XMR](/news/article/how-to-buy-monero)), and Zcash (ZEC) are mostly used to launder money globally. More than $40 billion has been laundered through ransomware and corrupt practices (bribes and embezzlement, among others) since 2017. 

The onus falls on regulatory bodies across the globe to draw up a unified regulatory document against cryptocurrency crime that can monitor large transactions moving from one wallet to the other.  

This way, cryptocurrency crime could be ameliorated and gradually eradicated from the blockchain-based economy. 

Why is Cryptocurrency Crime Still on the Rise?

Tom Brady, a beloved US National Football League (NFL) figure, has found himself entangled in a significant financial predicament. Recently, documents related to the [FTX bankruptcy case ](/news/article/ftx-bankrupt-who-to-blame)revealed that Brady had invested substantial funds in the now-collapsed crypto exchange. Unfortunately, these funds have now become nearly worthless following the bankruptcy filing. 

Various media outlets, including The Insider and Bloomberg, have reported that Tom Brady held approximately 1.1 million FTX shares. Additionally, reports indicate that Gisele Bündchen, Brady's former wife and a renowned supermodel, also had a significant investment, owning approximately 680,000 shares in the exchange. 

This article explores the journey of Tom Brady, once an ambassador for FTX, and how he lost a considerable number of shares in the exchange. We will also assess the potential for the recovery of these funds. 

## Tom Brady FTX affiliations 

Since 2021, former NFL player Brady has served as the ambassador for the now-insolvent crypto exchange FTX. His ex-wife, Gisele Bündchen, has also been associated with the company. Together, they have participated in various [advertising campaigns promoting FTX services,](https://web.archive.org/web/20230111152240/https:/www.youtube.com/watch?v=_aCGMyrFn-8&t=55s) which have faced significant criticism from the crypto community. 

![FTX Tweet screenshot from 2021. Shows Tom Brady and his wife and announces they are to be FTX ambassadors. ](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/Screenshot_2023_07_17_at_09_34_48_5f7d387508.png)

Investors hold the couple responsible for intentionally encouraging people to invest in the crypto firm, leading to a lawsuit, as reported by [Business Insider](https://markets.businessinsider.com/news/currencies/tom-brady-shaquille-o-neal-golden-state-warriors-ftx-lawsuit-2023-5). The lawsuit was filed in November 2022 and included several other prominent figures from the sports and entertainment industries. 

On May 11, 2023, an amended complaint was filed in the Florida District Court. Reports suggest that Dan Friedberg, the former chief compliance officer of FTX exchange, is cooperating with the lawyers and providing valuable information regarding the FTX promotional campaigns. Friedberg's involvement indicates that a substantial portion of the campaigning occurred in Florida. 

Initially, some defendants claimed that the promotional activities were unrelated to Florida. However, with Friedberg's statement, the class action lawyers now have evidence to challenge the defendants' claims. Currently, the legal proceedings for the case are underway in the Florida District Court. 

## Can Tom Brady FTX shares be recovered? 

Brady and his former wife, Bündchen, possessed a combined total of approximately two million devalued shares. Before the [collapse of FTX](/news/article/ftx-collapse-blockfi-suspend-withdrawals), these shares held a considerable value in the millions. Forbes estimated Brady's claims to be [worth around $45 million](https://www.forbes.com/sites/chasewithorn/2022/11/10/exclusive-these-investors-stand-to-lose-the-most-from-ftxs-implosion/?sh=39ec68862670) and Bündchen's shares to be approximately $25 million. However, as [Sam Bankman-Fried](/news/article/former-ftx-ceo-sbf-arrested)'s firm faced mounting losses, the value of these shares plummeted. 

Currently, the chances of stakeholders fully recovering their funds are improbable. The downfall of FTX resulted in a loss of approximately $32 billion, with only [$7.3 billion](https://www.reuters.com/technology/bankrupt-crypto-exchange-ftx-has-recovered-73-bln-assets-attorney-2023-04-12/) having been recovered thus far. Given this significant disparity, it is unrealistic to expect all stakeholders to be able to [retrieve their assets](/news/article/ftx-news-assets-recovered). 

## Other celebrities who lost funds in the FTX collapse 

Brady and Bündchen are not the only high-profile individuals involved with [Sam Bankman-Fried's bankrupt exchange](/news/article/sam-bankman-fried-lost-billions). A roster of celebrities from the sports and entertainment worlds became investors in the company prior to its insolvency. Notably, Robert Kraft, the owner of the New England Patriots, held approximately 630,000 common shares in the firm. 

The sports industry features other notable names, including Golden State Warrior's basketball player Stephen Curry, former NBA player Shaquille O'Neal, baseball player David Ortiz, and tennis player Naomi Osaka. 

In addition to sports personalities, the list of celebrities affected by FTX's collapse includes renowned comedian Larry David, entrepreneur Kevin O'Leary, and numerous others. 

## Final words 

Tom Brady, a legendary NFL player with seven Super Bowl championships under his belt, made headlines when he joined the FTX crypto exchange as an ambassador in 2021. Alongside his then-wife, Gisele Bündchen, Brady actively promoted the exchange's services. 

Not only did he lend his influence, but he also made significant investments in the form of 1.1 million common shares, valued at a staggering $45 million. 

Unfortunately, as the exchange encountered insolvency, the value of these shares plummeted, putting Brady's substantial investment at risk of significant loss. Brady is now facing a lawsuit about his promotion of FTX services, further complicating his involvement with the exchange. 

red image of Tom Brady from the NFL looking confused with FTX app on a phone

Tom Brady FTX ambassador may lose 1.1m shares

Cryptocurrency has revolutionized how we think about money, and it's no surprise that scammers have been hopping on board. With cryptocurrencies, fraudsters can operate crypto scams with near anonymity and tap unsuspecting victims for large sums of money – faster than ever before. Despite the hype surrounding crypto investment opportunities, it's essential to remember that investing isn't without risk. 

If you're not careful when navigating this new international economy, then there's a strong chance you could become a victim of crypto scams. That's why understanding cryptocurrency is so essential – knowledge is power! 

Join us as we dive into common schemes criminals use against unwary crypto investors, how to identify potential traps ahead of time, and ways to protect yourself today! 

## What are crypto scams? 

Crypto scams are [increasingly prevalent.](https://time.com/personal-finance/article/popular-crypto-scams/) These scams often involve fraudulent schemes designed to trick individuals into buying fake or fraudulent cryptocurrency. It's essential to be aware of crypto scams as they can result in serious financial losses for those who fall victim to them. 

Common crypto scams include phishing, Ponzi schemes, and fake cryptocurrencies. By staying informed and cautious, you can protect yourself from falling victim to those who seek to take advantage of unsuspecting individuals in cryptocurrency. So be sure always to conduct thorough research and exercise caution before making any investments in the crypto space. 

## Common types of crypto scams 

As crypto continues to surge in popularity, so too do the number of scams that attempt to take advantage of unsuspecting investors. 

Phishing scams involve impersonating a legitimate company or individual to obtain personal information. 

Fake ICOs (initial coin offerings) make promises of huge returns on investment that never materialize. Ponzi schemes rely on new investors to pay existing investors, eventually collapsing when there are no longer enough new investors to sustain the scheme. 

Fake wallets or exchanges trick users into depositing money or crypto into a fraudulent account. 

By understanding the warning signs of these scams, investors can better protect themselves from falling victim. 

## How to protect yourself from crypto scams 

With the growth in crypto popularity has come [a surge of crypto scams](/news/article/isreal-crypto-scamming-network-targets-auusies). In 2022, more than $4 billion was estimated to have been lost to crypto scams. That is expected to rise in 2023. 

As the popularity of cryptocurrencies rises, so do opportunistic scammers looking to take advantage of unsuspecting investors. Protecting yourself from crypto scams can seem overwhelming, but it's crucial to safeguard your investments and financial information. 

An effective way to prevent scams is education. Familiarize yourself with common tactics scammers use, such as phishing emails or unsolicited investment offers. Additionally, research potential investments thoroughly before committing any funds. Ensure the company has a reputable history; don't hesitate to ask questions. 

Finally, be cautious of promises of high returns or quick profits. By staying informed and vigilant, you can protect yourself from scams and safely navigate the exciting world of cryptocurrency investment. 

## Red flags to look out for 

Navigating the cryptocurrency world can be daunting, especially for those new to the game. While many investors have made significant gains, exercising caution and vigilance is essential. 

There are several red flags that buyers and traders should look out for, such as scammers promising instant riches or unverified exchanges offering deals too good to be true. Researching potential investments thoroughly and utilizing reputable platforms is essential to avoid falling victim to fraudulent schemes. 

Individuals should be wary of investments that lack transparency or have anonymous developers with no established track record. By staying informed and aware of potential red flags, investors can adopt a proactive approach and safeguard their investments in the digital currency space. 

The world of cryptocurrency has become a money maker for many, but, unfortunately, the same opportunity has been used by scammers to perpetrate fraud. As demand for digital currencies grows, so does the number of fraudsters looking to exploit unsuspecting victims. 

## What if you become a victim? 

The cryptocurrency world can be exciting and risky, especially with the prevalence of scams. If you become a victim, there are essential steps to take. 

First, gather all evidence of the scam, including transactions, communications, and other documentation. Then, report the scam immediately to the relevant authorities, like the Securities and Exchange Commission. 

Contact your credit card company or bank to report fraudulent transactions and freeze your accounts if necessary. Remember to stay vigilant and educate yourself on the warning signs of crypto scams to prevent future incidents. 

## Resources available for victims 

It's important to know that if you've fallen victim to a crypto scam, resources are available to you. 

Some organizations can support and assist victims of crypto scams. The National Cyber-Forensics and Training Alliance is one such organization offering resources and guidance to victims. 

It's also important to be vigilant and educated about scams in the crypto world, so you can better protect yourself and your investments. Remember, help is available if you become a victim of a crypto scam. 

It is imperative to understand that [crypto scams are not always easy to spot](/news/article/infinox-forex-broker-scam-uncovered); however, with the proper information and understanding of the common types of crypto scams, how to protect yourself, and red flags to be aware of, your chances of becoming a victim can be reduced. 

Remember that awareness is key in protecting yourself from these increasingly sophisticated schemes, and finding ways to invest your hard-earned money wisely should always be at the forefront of your mind! 

It is essential to remember that crypto scams could rise in 2023. With the ever-growing popularity of cryptocurrencies, it is crucial to be aware of scams and always take precautions. 

Always check the service provider's legitimacy, research the project before investing, and never share your private keys or passwords with anyone. Lastly, stay informed about the latest news and developments in the crypto world to ensure you are not falling victim to a crypto scam. 

man coding crypto scam stock photo with red filter

Avoid becoming a victim of crypto scams 

Terraform Labs CEO and co-founder Do Kwon [has been arrested in Montenegro](/news/article/do-kwon-hiding-in-serbia). He oversaw the multi-billion dollar collapse of the TerraUSD-LUNA ecosystem and has been [charged with fraud](/news/article/terraform-labs-accused-of-fraud-by-sec) by US prosecutors.

## Do Kwon arrested: Series of events

In early 2023, Do Kwon and Terraform Labs [were accused of](/news/article/do-kwon-red-notice) "orchestrating a multi-billion dollar crypto asset securities fraud", with eight charges announced against him by US prosecutors.

He was arrested on 23 March in Montenegro, travelling under a false name and in possession of fake documents. South Korean authorities released a separate arrest warrant for him in September 2022. They were at the scene to confirm his identity through official fingerprint records.

## Do Kwon arrested: Why did the TerraUSD-LUNA ecosystem collapse?

The Terra ecosystem was created in 2018 by Terraform Labs and is largely known for its decentralised algorithmic stablecoin, TerraUSD (UST), and reserve asset cryptocurrency, Luna (LUNA). The (now defunct) algorithmic stablecoin system is simple to understand:

•	1 UST = $1 LUNA.

•	If UST<$1, burn UST and mint LUNA. Burning will raise UST's price.

•	If UST>$1, burn LUNA and mint UST. Minting will decrease UST's price.

What [made this system a Ponzi scheme](/news/article/terra-luna-collapse) was the unsustainable interest rate of nearly 20% offered upon staking UST on the Anchor Protocol.

## The system was built to fail.

Upon shifting from a fixed interest model to a dynamic one, UST began its downfall on 7 May, 2022, when a UST whale sold an enormous amount of the stablecoin.

To compensate for the de-pegging of UST, mass burning of the stablecoin began, leading to a surplus of LUNA on the open market. Both cryptocurrencies collapsed and more than $40B in UST-LUNA market value was wiped out. Even a $3.5B Bitcoin reserve fund failed to control the downslide of the value of both crypto tokens.

In a nutshell, the model was based on minting an endless supply of LUNA to maintain UST at $1 and keep investors happy with an unsustainable interest rate model.

It should be noted that Do Kwon and the algorithmic stablecoin system were called out by a renowned economist Frances Coppola well before all this unravelled. Do Kwon mocked her publicly.

![dokwon.png](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/dokwon_f0af2d76e8.png)
 
Source: [Twitter (@stablekwon)](https://twitter.com/stablekwon/status/1410491186196795398?s=20)

I hope that [Do Kwon’s arrest is one step](/news/article/do-kwon-terra) towards a safer and better crypto space for all.


do kwon beind bars in montenegro with red filter

Terraform Labs CEO Do Kwon Arrested

On Wednesday, the US DOJ (Department of Justice) and the Securities and Exchange Commission (SEC) reported that Guo Wengui, a Chinese billionaire living in exile, was detained in New York for supposedly planning a fraud scheme worth more than $1 billion which involved cryptocurrency.

Guo, also known as Miles Guo and Ho Wan Kwok, or "Brother Seven," has been accused of committing 12 counts of wire fraud, securities [fraud](/news/article/terraform-labs-accused-of-fraud-by-sec), bank fraud, and money laundering. The DOJ stated that he allegedly used false statements and representations to persuade hundreds of thousands of his online followers to invest in various entities, resulting in more than $262 million in victim funds being obtained through the Himalaya Exchange, a supposed [cryptocurrency](/news/article/what-is-future-of-cryptocurrency) ecosystem.

The DOJ disclosed that it had seized around $634 million from 21 bank accounts linked to the alleged fraud.

The DOJ also [stated](https://www.justice.gov/usao-sdny/pr/ho-wan-kwok-aka-miles-guo-arrested-orchestrating-over-1-billion-dollar-fraud-conspiracy) that Guo Wengui is accused of making false statements and offering his investors inflated returns in exchange for supporting various ventures, including GTV Media Group Inc. In addition, Guo has been charged by the SEC for participating in unregistered and deceitful offerings that garnered more than $850 million.

## Bail Denied for Guo Wengui

According to the SEC, an investment scheme that employed cryptocurrency security called "H-Coin" or "Himalaya Coin" deceptively collected hundreds of millions of dollars from investors.

The project falsely stated that 20% of the coin's value was supported by gold and that the issuer would compensate investors in the event of any losses. According to Gurbir S. Grewal, the director of the SEC's enforcement division, the issuer, Guo, capitalized on the hype and appeal of cryptocurrency and other investments to victimize thousands and fund his and his family's luxurious lifestyle.

On Wednesday, the SEC made this statement, and CNN reported that Guo was denied bail at a hearing held the same day.

US Attorney Damian Williams claimed that Guo had committed the crime of profiting from embezzled money. Williams specifically mentioned that Guo had used the [stolen funds](https://twitter.com/SDNYnews/status/1636013342962712577?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1636013342962712577%7Ctwgr%5E5aa49442bd1adc0405714d5fc3a9c0868d934968%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fforkast.news%2Fheadlines%2Fus-accuses-exiled-chinese-tycoon-guo-wengui-of-1-billion-crypto-linked-fraud%2F) to buy a 50,000 square-foot mansion in New Jersey for himself and his close relatives, as well as a Ferrari valued at $3.5 million, two mattresses worth $36,000 each, and a lavish yacht that cost a whopping $37 million.


red backgound of money with guo wengui and a white dog

Guo Wengui Accused of $1 Billion Crypto Fraud 

The founder of the Bitzlato crypto exchange, Anatoly Legkodymov, has denied money laundering charges against him in a US court.
He is accused of processing more than $700 million through his firm. Relating to these charges, he was arrested on 17 January in Miami.  

## First court appearance for Bitzlato crypto firm founder

The proceedings of a money laundering case against Legkodymov are ongoing in the federal court of New York. He appeared before the court for the first time on 14 March, 2023, when he denied all the fraud charges.

The court has ordered the detention of Legkodymov without bail for the charges of illegally processing money. The Federal Bureau of Investigation ([FBI](https://www.fbi.gov/investigate)) was involved in arresting the crypto exchange founder. 

## Allegations involve $700 million

Allegedly, the founder of Bitzlato is a Russian national and a resident of China. The FBI detained him for his alleged involvement in illegal money transfers through the exchange.

He is accused of managing a Hong Kong-based cryptocurrency firm and did not ensure [anti-money laundering](/news/article/crypto-aml) measures were followed.

According to reports, the business [allegedly processed](/news/article/bitzlato-co-founder-charged-with-money-laundering) around $700 million of illegal funds. The illicit funds are related to numerous crimes like drug trafficking and ransomware. 

Bitzlato may also have ties with the darknet market called Hydra, according to further reports. Moreover, another member of [a crypto pyramid scheme related to Russia](https://news.bitcoin.com/another-member-of-russian-crypto-pyramid-finiko-arrested-in-uae/) was arrested in the UAE.  

## Accusations against other members of Bitzlato

More crypto exchange members were also detained in late January. Three members of the executive body were arrested in Europe.

The firm's co-founder, Anton Shkurenko, was also involved in the investigations. In February, he was interrogated by the Russian authorities, but later released. He has also given an interview recently where he mentioned that he would be restoring operations of the firm from Russia.


Anatoly Legkodymov founder of bitzlato with red image of court

Bitzlato Crypto Exchange Founder Denies Charges 

PeckShield, a security company based in China, alerted British crypto lender Euler on [Twitter](https://twitter.com/peckshield/status/1635203838939652097?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1635218198042918918%7Ctwgr%5E2f837db4eb37d5b619c2b3b4b80aab66b93c455d%7Ctwcon%5Es3_&ref_url=https%3A%2F%2Fcointelegraph.com%2Fnews%2Feuler-finance-hacked-for-over-195m-in-a-flash-loan-attack) about a possible hack. It posted transaction details indicating that the hack resulted in a loss of $197 million.

PeckShield suggested that the hackers took advantage of a vulnerability in Euler's system. Euler acknowledged the situation and stated it was working with security experts and law enforcement. The lender also promised to provide more information as soon as it becomes available.

Crypto critic Molly White, who documents [hacks](/news/article/north-korea-hackers-stole-1.7b-crypto) and scams on her blog ‘[Web3 is Going Just Great’](https://web3isgoinggreat.com/), stated that the hack on Euler was the most significant this year. 

White ranked it as the eighth largest theft on the all-time list, although it pales compared to some of the crypto industry's most massive scams, reaching billions of dollars.

At the beginning of last year, the [crypto](/news/article/oxen-crypto-price-prediction) sector was on an upward trajectory, with the market for digital tokens and cryptocurrencies valued at hundreds of millions of dollars.

Crypto companies were aggressively marketing themselves through TV commercials, sports team sponsorships, and promoting their technology as revolutionary, as they aimed to attract new investors from the general public.

## Euler crypto falls victim to malicious hackers leveraging flash loans

According to a detailed analysis conducted by the blockchain security firm [Slowmist](https://twitter.com/SlowMist_Team/status/1635288972103667714?t=zUb040PYVunVm0p3pV1eGg&s=19), the recent attack on Euler crypto lender involved the use of flash loans by the attacker. The funds were deposited and leveraged twice to trigger [liquidation](/news/article/bitcoin-liquidations-spark-price-spike), after which the attacker sent the funds to the reserved address as well conducting a self-liquidation to collect any remaining assets.

The attack's success was attributed to two factors:

•	Funds were sent to the reserved address without undergoing a liquidity check, resulting in soft liquidation.

•	The soft liquidation logic was activated by the high leverage, which allowed the liquidator to transfer only a fraction of the liabilities to themselves while obtaining most of the collateral funds from the liquidated user's account.

Gustavo Gonzalez, a solutions developer at the blockchain security firm OpenZeppelin, informed [Cointelegraph](https://cointelegraph.com/news/euler-finance-hacked-for-over-195m-in-a-flash-loan-attack) that the entire incident occurred in a single transaction per pool, utilizing flash loans from AAVE.


Euler Crypto Lender Suffers $200m Hack 

A crypto firm backed by US rapper Jayceon Terrell Taylor, also known as "The Game", had its licence revoked by the US Securities and Exchange Commission [for violating securities laws](/news/article/sec-probe-paxos-over-busd) after falling short of submitting the necessary periodic reports.

The crypto startup, called ParagonCoin Limited, leverages blockchain technology for the legal cannabis sector and was founded in 2017 by Jessica VerSteeg.

## Why was ParagonCoin Limited’s registration revoked?

According to a class-action suit against ParagonCoin Limited in January 2018, the cryptocurrency startup [allegedly violated securities laws](/news/article/crypto-exchange-kraken-faces-sec-probe) in the initial coin offering (ICO) it held back in 2017, raising $70M.

The cannabis crypto firm promoted its native token 'PRG' as a currency for the legal cannabis industry and hired American rapper The Game to promote its offering. 

However, it failed to register its token sale with the SEC.
As such, a civil penalty was imposed on the cryptocurrency startup, requiring it to pay a fine of $250,000, register its token PRG as a security, and file periodic reports with the SEC.

The SEC was prompted to commence legal proceedings against the firm in February 2022, as it violated the [terms of its settlement with the SEC](/news/article/paul-pierce-settles-with-sec). ParagonCoin Limited failed to file a report since March 2019, in which the company stated that it lost more than $10M in 2018.

According to the SEC, the cannabis cryptocurrency startup ignored a delinquency letter sent to it by the SEC.
Additionally, [the SEC pointed out](/news/article/sec-crypto-enforcement-warning) that ParagonCoin Limited did not reply to its order commencing proceedings in February 2022, nor did it respond five months later to offer reasons why it should not be found guilty as things stand.

This is not the first mess The Game and the startup have found themselves in. However, this could be the last for ParagonCoin Limited. Back in 2021, both the rapper and the cryptocurrency startup's executives were found to be liable for more than $12M in a class-action lawsuit. You can read more here.

It is yet to be seen what steps ParagonCoin Limited will take to salvage the situation. Rapper The Game, meanwhile, continues to thrive in the Web3 space, with numerous partnerships in place, including as co-founder of the popular Web3 live-streaming platform, Shiller.


red image of rapper "the Game" and Paragon coin logo

Rapper The Game's Crypto Firm Licence Revoked

Police in Massachusetts have charged a civic employee for setting up a scheme for illegal crypto mining in a small crawl space under a local school. Police alleged that 39-year-old Nadeam Nahas unlawfully attached his bank of computers to the electrical system at Cohasset Middle High School, which is at least 10 miles out of Boston.

According to [court documents](https://www.bostonglobe.com/2023/02/24/metro/man-accused-running-crypto-mine-out-cohasset-school-appears-quincy-court-arrest-warrant-canceled/), the criminal [crypto-mining](/news/article/mining-company) scheme comprised 11 computers and a multifaceted cooling system that added $17,500 to the school’s electricity bills. Authorities believe Nahas ran his crawl space mine from April to December 2021, when he worked as HVAC coordinator and assistant facilities director beginning January 2021 before resigning in early 2022.

## Items used in crypto-mining operation

In a press statement to the [BBC](https://www.bbc.co.uk/news/world-us-canada-64767178), Cohasset Police boss William Quigley stated that investigations began in December 2021 after the facilities director of the town discovered electrical wires, ductwork, and several computers that looked misplaced during a routine inspection. During the initial investigation, Nahas and his boss, the town's facilities director, reported they had shut off the computers due to the high heat they generated.

However, a subsequent investigation involving the US Coast Guard and the Department of Homeland Security placed Nahas, initially denying any involvement, at the center of the operation of illegal crypto mining. Police found credit card receipts in Nahas's name that were used to buy Coleman 48qt coolers, extreme weather foil, insulated flex ducts, a water-based sealant tub, and insulation sleeves. All the items were located in the crawl space and used in the illegal crypto-mining operation.

## On high alert about cryptojacking

Crypto mining is a process used to validate cryptocurrency transactions and create new cryptocurrency coins. However, the process consumes [massive amounts of electricity](/news/article/crypto-mining-farms). As cryptocurrency becomes more popular and grows in value, crypto mining also becomes a magnet for crypto thieves. 

Last December, authorities in Thailand seized [3,500 illegal crypto-mining units](https://www.bangkokpost.com/thailand/general/2455120/thousands-of-illegal-cryptocurrency-mining-units-seized) from 41 commercial buildings and apartments in Bangkok connected directly to power lines. They unlawfully drained more than $14 million worth of electricity.

Big tech firms like Amazon, Microsoft, and Google have always been on high alert about[ cryptojacking,](https://www.kaspersky.com/resource-center/definitions/what-is-cryptojacking) a different kind of illegitimate crypto mining where hackers hijack a computer's resources without the owners' knowledge to mine cryptocurrencies. Privacy coin [Monero](/news/article/how-to-buy-monero) (XMR), which is famous with Dark Web users, is the most popular coin mined this way.

Illegal Crypto Mining Syndicate Busted

[Becca Balint](https://vtdigger.org/2023/02/28/becca-balints-1-million-crypto-benefactor-pleads-guilty-to-campaign-finance-fraud/), a member of the US House of Representatives from the state of Vermont, has been thrown into the spotlight again after Nishad Singh, an ex-executive of insolvent cryptocurrency exchange FTX who contributed $1 million in advertising money to her congressional push, pleaded guilty to campaign finance fraud on 28 February.

Singh said he is sorry for his role in the bankrupt crypto firm. He reiterated that he only knew by mid-2022 that Alameda Research, the hedge fund run by founder [Sam Bankman-Fried](/news/article/sam-bankman-fried-bail-co-signers-revealed) (SBF), was borrowing customer funds at [FTX](/news/article/ftx-funds-political-donations-to-be-recovered) without informing depositors.

The association of the politician with FTX has added more fuel to the fire as allies of SBF, which included Singh, contributed a minimum of $26,000 directly to support her campaign. Aside from that, the Democratic Party in Vermont was also a beneficiary of FTX contributions. 

SBF's inner circle continues to crumble. Singh is the third member of the once-thriving crypto firm to collaborate with US prosecutors with the hope of working out a deal. 
  
The latest link to Bankman-Fried's ally comes a few days after a superseding [indictment](https://vtdigger.org/2023/02/23/becca-balint-cooperating-with-federal-prosecutors-as-new-allegations-against-sam-bankman-fried-emerge/) filed on 23 February laid out an alleged scheme by the founder and former CEO to illegally move investor money to political campaigns to help improve his standing with representatives in Washington, DC.

Prosecutors believe his consistent donations were a way of pushing decision-makers to consider his preferred regulatory agenda for the entire decentralized finance economy.  

## Becca Balint is cooperating with authorities 

According to her campaign manager, Natalie Silver, Vermont's leader in the House of Representatives is fully cooperating with federal authorities in the investigation into SBF's scheme to pour a minimum of $1 million into a super PAC (political action committee) to support a candidate who favoured LGBTQ issues.   

After serving as a member of the Vermont Senate, Balint made history by becoming the first person from the LGBTQ+ community to be elected to Congress.


red image of becca balint and sam bankman-fried in front of sign saying guilty

Becca Balint Contributor Admits Fraud 

A network of crypto investment scammers operating in Israel is targeting Australians, investigations have revealed. It is an organised network that works as a call centre. The scammers used social media ads, showing lucrative profits to target potential victims.
 
## Authorities uncovered Israel crypto scammers

Authorities from four countries were involved in an investigation to uncover a global network of [cryptocurrency scammers](/news/article/crypto-scams-failing). The countries involved include Germany, Serbia, Bulgaria, and Cyprus. 
 
![Screenshot 2023-02-24 at 09.32.58.png](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/Screenshot_2023_02_24_at_09_32_58_0494957298.png)

[Source](https://twitter.com/australian/status/1628877400556834816)

According to a The Australian report, the authorities raided four call centres in [Serbia](/news/article/do-kwon-hiding-in-serbia). In addition, they searched around 11 residential addresses, arrested 15 suspects, and officers recovered around $1.46 million worth of digital assets. The country is trying to strengthen its [crypto regulations](/news/article/australia-crypto-regulation). 

Further investigation revealed that the network was operating through Israel and the main targets for this network were Australians.
Inadequate investigations allowed scammers to target Aussies
The Australian report also disclosed that inadequate investigative measures for online fraud in the country have allowed scammers to target their citizens.

Australia is a wealthy country with no federal authority to prevent such scams, which gives an open chance of fraud and those intent on scamming victims.

IFW Global’s Senior Investigator, Mark Solomon, explained that, in general, Australians are "open-minded" and "friendly" people. That's why they are more open to online relationships. Hence, if bad actors use the right strategy, they can easily be persuaded.

Solomons also said Israeli crypto fraudsters spend the stolen money on their lavish lifestyles. He mentioned that these individuals are flying private jets, own fancy cars, and have investments in real estate.
Meanwhile, they maintain their lifestyle by "sucking" savings out of the Australian economy.

## Investment scams in Australia

In 2021, ACCC reported that citizens lost more than $2 billion through investment scams. According to [Scamwatch](https://www.scamwatch.gov.au/scam-statistics?scamid=all&date=2023), the country lost over $568.6 million through such scams. 


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